The Daily - France’s Battle Over Retirement

Episode Date: March 16, 2023

This episode contains strong languageMillions of people have taken to the streets in France to protest a government effort to raise the retirement age to 64, from 62, bringing the country more in line with its European neighbors.Today, as Parliament holds a key vote on the proposal, we look into why the issue has hit such a nerve in French society.Guest: Roger Cohen, the Paris bureau chief for The New York Times.Background reading: After large protests, all eyes were on the French Parliament on Thursday as it prepared to vote on the measure to increase the retirement age by two years.Here are some of the reasons so many people in France are protesting the proposals.For more information on today’s episode, visit nytimes.com/thedaily. Transcripts of each episode will be made available by the next workday.

From The New York Times, I'm Sabrina Tavernissi, and this is The Daily. Millions of people have taken to the streets in France to stop a government proposal that would raise the retirement age to be more in line with its European neighbors. We're protesting because we don't want to spend the rest of our life just working without retirement. It's a democratic problem. Today, as the French parliament votes on the proposal, Paris bureau chief Roger Cohen explains why it hits such a nerve in French society

and why French president Emmanuel Macron pushed for it anyway. It's Thursday, March 16th. Roger, hello. Hello, Sabrina. So, Roger, I've been watching all of these protests in France. Millions of people on the street. Help me understand what exactly is going on, why people are so upset. Well, Sabrina, there's been an enormous degree of agitation and street protest in France over the last couple of months in response to President Emmanuel Macron's push to raise the retirement age in France to 64 from 62. These are new pictures just coming into us this morning, the scene in the streets,

just massive disruption. The result is that eight times in the last seven weeks, there has been tumult. Now people are here once again to say non to President Emmanuel Macron's plans to raise the retirement age from 62 to 64. Massive numbers of people in the street, not only in Paris, but throughout France. French union workers aiming to shut down critical industries across the nation, walking off the job and into the streets. The metro or subway is scarcely functioning. Bus service is very limited.

You can't get a hold of the equivalent of the city bikes here. They're all taken. And because the garbage collection service is on strike, garbage has been piling up into great mountains of trash overhead Haid. Fortunately, the weather has been cold, so the stink of it is not appalling as it might be. While it's a very serious protest, the atmosphere has been, on the whole, fairly festive.

There's been very few incidents of actual violence, and the two main labour unions who have been organising this have kept pretty good organisational control of what's happening. So it's large numbers of people laughing a lot. Poking fun at Macron, who is widely hated for what he's doing, and talking about how life begins when work ends, which is a deeply held French conviction, very different from the American view that life is enriched and enhanced by work. Exactly, Roger. I mean, I was going to say that, you know, in the United States, of course, the retirement age goes up to 67. So this idea that millions of people are out on the streets for a proposal that bumps it up to 64 is really

pretty remarkable. So tell us about the French idea of this. What is it and why is it so different? There's a fierce French attachment to the view that this country does not want a brutal form of capitalism, that solidarity and equality are extremely important. In the French national motto, of course, you have liberté, égalité, fraternité, liberty, equality, and fraternity or solidarity. And to the French, the idea is pretty deep-rooted that, okay, you work for 30 to 40 years, but at that point, the state owes you your pension and that you work those years because at the end of it, you will enjoy this sort of nirvana of a time when you no longer have to work. And the French do not see work in positive terms. The word work, le travail, it has a negative connotation.

Oh, really? Yeah, yeah. Look, Sabrina, there's a very large private sector in France that has a lot of big and dynamic companies. And there are many French people who work very hard and work past the retirement age. But a large number of French people take the view that once they retire, that's when life will really kick in. And the important things like friendship, love, community, playing a game of pétanque or boule at sunset with a glass of pastis, traveling. That is what French people consider to be real life, not work. Right. So this is a longstanding thing in French society.

Why is all of this blowing up now? Well, it's blowing up now, Sabrina, because of President Emmanuel Macron and his deeply held personal convictions. He burst on the scene in 2017, becoming president at the age of 39, having been the finance minister. And he always had the belief that French society had to work more, to grow more, and that there were certain essential reforms that needed to happen. So he set about notably changing the labor code in France to make hiring and firing much more flexible than it had ever been. He set about establishing a tech sector in France. He attracted a lot of foreign investment. And part of this

conviction was also that ultimately the pension system in France would have to change. And what was the problem he was trying to solve for there, Roger? The fundamental problem, Sabrina, is that people are living longer. So there are more retirees as a proportion of the population. Whereas you had in the early 1960s about four active workers for every retiree, that number by the year 2000 had become 2.1 active workers. Now it's down to 1.7. Oh, wow. And the projection is that it will continue to fall.

So huge difference and really, in effect, imbalance, right, in the number of workers that are supporting every retiree. If there is no reform to the pension system, there are various projections. But all of them pretty much make clear that within a decade, the pension system would be beginning to pile up a considerable deficit. And that's a problem because the government would have to borrow money. It would have less money for other things at a time when it needs to make big investments in a whole range of areas ranging from defense to energy. A lot of people have suggested, well, why not

raise taxes on the rich, you know, instead of this measure? But Macron doesn't want to, he doesn't want to do that. So, Roger, what does Macron do? Roger, what does Macron do? Yeah, so pretty much from the outset, Macron sees France as a radical outlier that other European countries, notably Germany, had raised the retirement age many years earlier, and that this was something that had to be tackled. I understand that changes can be hard.

He turned to this in 2019. I see how decisions made can at times I understand that changes can be hard. He turned to this in 2019. I see how decisions made can at times cause worry and opposition. But do we have to give up on changing our country because of that? No. So Macron decides to propose a significant overhaul of the retirement system. The government wants to remove 42 different pension schemes and put in place a universal system for all workers. Macron was looking to give more individual choice

to people as to how they contributed and to find ways to cut costs. They needed remedy for a nation with an aging population or the beginning of the end of France as we know it. But the reaction from the French was immediate. The strike against pension reforms has become a record breaker. Nothing is moving in Paris. They're clogging highways, forcing landmarks to shut down.

They didn't like it. And there were massive strikes and demonstrations. And so the whole idea was mired in that when COVID arrived. And macro essentially went more or less overnight from somebody deeply concerned with government spending to the point of wanting this unpopular reform, to somebody who put no limits at all on government spending in order to get through COVID and help people through the crisis. And in the midst of that, that first attempt to reform the pension system fails.

Got it. So he fails to get it done. And I think it's been on his mind for the last four years. It's stuck in his craw. He didn't get it through. He wants to get it done. And I think it's been on his mind for the last four years. You know, it's stuck in his craw. He didn't get it through. He wants to get back to it. But COVID goes on. And then there's the small matter of his re-election, which becomes more complicated because then on top of everything else,

the Ukraine war breaks out two months before the election, and he wins the election. But of course, the war has changed the dynamic in other respects. So there's this double whammy, right, of COVID plus the Ukraine war. And that makes the problem that Macron has seen for a long time in the French economy that much more urgent, I would think. Well, he considers it more urgent. Millions and millions of French people don't think it's urgent at all. But yes, President Macron wants it, and deficits were run up through the massive spending in fighting COVID. fighting COVID. And Macron is determined that France transitioned to a green economy,

that it increased its defense budget in order to be able to arm Ukraine and also to be in a strong position vis-a-vis a Russia that could be aggressive toward Western Europe over the next decade or two. He's got a whole slew of priorities and then he thinks to himself, you know, we're spending more and more on people who are getting older and older and it doesn't make sense just on the basis of sheer mathematics and something has to be done about it. And so given all this, he decides to act. And a couple of months ago, the bill is introduced to raise the retirement age to 64 from 62. And this touched a nerve yet again in France. And that's why we have this vote today on the bill. And the vote is going to be very, very close. We'll be right back.

So, Roger, there's a vote today in the French Parliament. What's going to happen? Lay it out for me. Well, nobody knows exactly what's going to happen, but the situation is the following. In essence, Macron needs 289 votes to pass the bill. He has 260 through his Renaissance party, so he needs another 29. And the only party really prepared to give him any more support is the center-right Republicans. Whether they will, in fact, give him the 29 votes is unclear, but the government has been pushing hard to get those votes. It's gotten closer and closer as the protests have grown.

An expert whom I spoke to recently, Alan Duhamel, said he would have put the odds of it passing at 80% a month ago. Now he put it at 60%. So it's not a done deal. It's not a done deal, yet he seems to have reasonably good chances of getting it passed, right? Yeah, he has reasonably good chances. And if at the last minute, before voting begins, he decides that, no, the votes aren't there, there is an option under the Constitution to push this through without a vote.

But the price of that, the political price, would be enormous. The confrontation in France, which is already intense, would, I think, become explosive. What would it mean if the overhaul did go through? Like this thing that clearly many, many French people hate. Well, most fundamentally, if the bill passes, it becomes the law of the country. This does not mean at all that everything is going to quiet down overnight. But Macron's main concern will be with his legacy.

This will be an important part of his legacy. He thinks it's very important for France. But he also knows that Marine Le Pen, the far-right leader, has criticized him heavily for wanting to, quote, torture French people and deny them the promised pleasures of retirement. So she will use this in the years ahead to lambast Macron and try and build her support. And what Macron fears, most of all, according to people I've talked to, is that he might be succeeded by Marine Le Pen. Because

if Le Pen does come to power and the far right comes to power in France, Macron will be remembered quite substantially as the last president before the far right took over in France. And he doesn't want to be remembered for that. Roger, what would happen if this doesn't pass? Like, if the protesters basically win and the retirement age stays the same at 62? Well, it would be an acute embarrassment to the government, to the Prime Minister, Elizabeth Borne, and to the president, to Emmanuel Macron. The government under the Constitution would be able to reintroduce the bill but that's time

limited to about the end of the month and there's not much reason to think that if it didn't pass the first time it would the second i think it would be quite plausible for the government to determine that it was no longer in a position to govern as its policy had been rejected on such a fundamental matter. And you could get a vote of censure in the parliament that brings down the government and leads to new parliamentary elections. So to sum up, the country would be in uncharted waters with a number of unpredictable outcomes. So Roger, I'm thinking here of France in relation to other high-income countries,

like its neighbors in Europe. And they're all facing the same set of demographic facts, right? Longer lifespans, fewer children, which leads to a real imbalance in their pension systems. But with France, and I mean the opponents of raising the retirement age in France, it kind of seems like they're just defying the laws of economic gravity. Neighboring countries have already succumbed to them, but not France. Well, France has the most elaborate social security, social protection system in the world, probably, when it comes to healthcare,

when it comes to unemployment benefits, when it comes to retirement. And France is, although it's grown somewhat more unequal, it hasn't grown exponentially more unequal, as in, say, the United States and Britain over the last couple of decades. And the French think there's still a choice. They think the kind of capitalism that they see in the United States or some other countries, that is not what they want. They want to preserve their system. But I think, you know, this is a state-backed system and the French feel that the state should look after them. You're not going to hear French people talking about rugged individualism. Rugged individualism, forget about it.

Yeah, in some ways, you know, listening to you talk about the French system as an American, I'm kind of jealous. Well, as an American in France, I'm enjoying it. But the number of times in France you encounter the phrase, non, c'est pas possible, no, impossible. American can do, French, non, c'est pas possible. And I think that goes to President Macron's fundamental point. Last year he said, what we're facing here is a choice of society. And what I think he meant by that is that in order to remain strong, France has to make the investments I've talked about, and that France has to work those two years longer,

and that this is necessary for a strong Europe in a world that is looking pretty combustible, menacing, intensely competitive going forward. He believes that this is a reform that is essential for France to remain strong, to be dynamic, and to adjust to the new realities of life. to be dynamic and to adjust to the new realities of life. The alternative for France does look as if it could be one where the country is clinging to something from a bygone era at the cost of its vitality and dynamism. Roger, thank you. Thank you, Sabrina. On Thursday in Paris, French President Emmanuel Macron resorted to forcing his proposal through Parliament without a vote,

a politically risky move that enraged opposition lawmakers, who called it undemocratic. In the lower house of parliament, they booed, banged on their desks, and sang the French national anthem. The opposition now has 24 hours to file a no-confidence motion. If it is rejected, the most likely scenario, the bill passes and becomes the law of the land. We'll be right back. We'll be right back. concerns about its financial health. The bank said it would borrow up to 50 billion Swiss francs, or about $54 billion, to shore up its finances. Unlike Silicon Valley Bank, a regional bank in the U.S. that collapsed last week, Credit Suisse is considered systemically important in the global

financial system. Its troubles on Wednesday spooked investors, prompting a wider sell-off in bank stocks. Today's episode was produced by Will Reed, Muj Z wider sell-off in bank stocks. Today's episode was produced by Will Reed, Muj Zaydi, and Nina Feldman. It was edited by Patricia Willans with help from Paige Cowett and Lisa Chow. Contains original music by Diane Wong and Marian Lozano, and was engineered by Chris Wood. Our theme music is by Jim Brunberg and Ben Lansford of Wonderly. That's it for The Daily. I'm Sabrina Tavernisi. See you tomorrow.