Sarkozy Stands Firm On Pension Reform

by Ulrika Lomas, Tax-News.com, Brussels

14 July 2010

In a clear display of defiance, French President Nicolas Sarkozy has categorically insisted that he will not be moved on plans to increase the legal age of retirement to 62 or to align public sector pension contributions with those of the private sector.

Recently overshadowed by the Bettencourt tax scandal, up until now dominating the headlines, pension reform in France has once again assumed centre stage following examination of the proposals by the country’s council of ministers and following a statement by the French President that the two key measures contained in the pension reform bill are not up for negotiation.

According to Sarkozy, the government is to stand firm on the question of raising the legal age of retirement to 62. Emphasizing the need for a balance of public-private sector pension contributions, Sarkozy noted that it was “a question of justice”, and a matter that cannot be changed. While acknowledging that a discussion will take place in due course with the country’s social partners, and conceding that there might be scope for further discussion on certain points, Sarkozy nevertheless warned that further demonstrations would have no bearing on the final outcome of pension reform.

Unveiled in mid-June, the French government’s pension reform bill aims to return the country’s pension scheme to balance by 2018, and also includes plans to increase taxes on income from capital and on the country’s top earners.

Sarkozy also underlined the fact that France’s Labour Minister Eric Woerth, at the centre of allegations in the Bettencourt affair, would continue in his role of leading the reform. Woerth is accused of having shielded the L’Oréal heiress Liliane Bettencourt from tax investigations in return for illegal party donations during the 2007 election campaign. Liliane Bettencourt allegedly concealed EUR78m from the French tax authorities in Switzerland. Despite having been absolved of any wrongdoings, Woerth has nevertheless tendered his resignation as treasurer of the Union for a Popular Movement (UMP) party, on the advice of the President.

The fate of the pension reform bill will now ultimately be decided in parliament. The bill is due to be examined by the National Assembly Social Affairs Committee on July 20, ahead of the plenary session in September.

Recommended