PARIS — François Bayrou, the newly appointed prime minister of France, has announced the renewal of discussions regarding the contentious proposal to increase the retirement age from 62 to 64. This decision marks a significant step as Bayrou seeks to ensure greater stability for his minority government. In his inaugural address to the National Assembly, he stated his intention to revisit this issue in collaboration with social partners.
Bayrou emphasized his commitment to pursuing “a new path of reform” devoid of preconceived notions, including the retirement age, provided that financing for these changes is assured. The previous proposal from President Emmanuel Macron faced extensive protests and backlash from January to June 2023, which ultimately weakened Macron’s leadership.
As Bayrou outlines his key priorities, he is particularly focused on crucial fiscal decisions, especially in the wake of a budgetary crisis that has arisen after the fall of the prior government. An emergency law was implemented to facilitate tax collection starting January 1, allowing the state to manage basic expenditures and avert a governmental shutdown. However, it is a comprehensive budget that is essential for reducing the country’s deficit and securing vital spending on defense amidst ongoing geopolitical tensions.
Bayrou reiterated the importance for France and the European Union to remain steadfast, especially considering alarming comments from Donald Trump that hinted at territorial threats against sovereign nations. The pressure from financial markets, rating agencies, and EU regulations further necessitates that France adhere to strict debt limits in order to prevent higher borrowing costs that might destabilize the eurozone.
In light of these challenges, France’s deficit is projected to hit 6% of its gross domestic product in 2024, with Bayrou aiming to decrease it to 5.4% this year and eventually lower it to 3% by 2029, conforming to EU mandates. He noted that substantial spending reductions would be necessary but did not delve into specifics regarding which areas would be targeted.
The discussions surrounding pension reform are particularly significant. The legislation that raised the retirement age was approved despite widespread demonstrations, and its implementation has begun. Socialists are advocating for a “suspension” of the planned reforms, suggesting a return to the previous age of 62, especially for individuals in hard labor or those with lengthy careers.
While Bayrou did not declare any definite suspension of reforms, this shift towards renegotiation is seen as an attempt to reach out to the left. By doing so, he hopes to establish a non-aggressive agreement with the Socialists to prevent them from undermining his government. Bayrou posited that the controversial age of 64 could potentially be adjusted based on the negotiations’ outcomes, asserting the necessity of maintaining the financial integrity of the pension scheme.
However, conservatives caution against halting the pension adjustments, highlighting that a reversal could impose a hefty financial burden, estimated at 3.4 billion euros in 2025, escalating to nearly 16 billion euros by 2032. To facilitate these negotiations, Bayrou proposed a “conclave” comprising representatives from labor unions and employer organizations, aiming for a resolution within a strict three-month timeline. If consensus is reached, the pension modifications would be legislated; otherwise, the original reform plan would stand.
The stability of Bayrou’s Cabinet is precarious, hinging on a coalition between Macron’s centrist allies and conservatives from The Republicans party, which together still lack a parliamentary majority. The preceding government lasted merely three months before being ousted by opposition lawmakers amid budgetary controversies.
The Socialists have expressed a willingness to negotiate while remaining in opposition, with their leader at the National Assembly acknowledging an openness to discussions on pension reforms. Nonetheless, their overarching aim remains to reverse the reform, restoring the retirement age to 62. Concurrently, the prospect of another no-confidence motion looms, as the far-left France Unbowed party has declared its intention to challenge the government.
Marine Le Pen, the leader of the far-right National Rally party, who played a key role in the dismissal of the prior government, is also a significant player in the current political landscape. Bayrou consulted her during the formation of his administration, and her party holds the largest group in the National Assembly. Recently, however, Bayrou’s administration has shifted its focus to negotiations with the Socialists, Greens, and Communists instead of engaging with Le Pen’s party regarding budget matters.
National Rally representatives have reiterated their positions regarding budgetary measures, opposing any that increase medication costs or impose new taxes on businesses. As the political climate continues to evolve, Le Pen faces her own challenges ahead, including a court ruling regarding alleged illegal financing that could hinder her political aspirations.
