PARIS (AP) — France’s new Prime Minister François Bayrou announced Tuesday the renegotiation of a controversial plan to raise the retirement age from 62 to 64, a crucial step to bring greater stability to his minority government.
In his first address to members of the National Assembly, Bayrou said: “I decide to put this issue back on the agenda with the social partners for a short period of time and under transparent conditions.”
Bayrou promised to “strive for a new path of reforms, without totems or taboos, not even the retirement age,” as long as funding for the changes is guaranteed.
President Emmanuel Macron’s plan to raise the retirement age from 62 to 64 sparked months of mass protests from January to June 2023 that damaged his leadership.
A month after his appointment by President Emmanuel Macron, Bayrou also outlined other top priorities, including key budget decisions.
What does Bayrou suggest?
Bayrou urgently needs to adopt a draft budget for 2025. After the collapse of the previous government, an emergency law was passed to allow the state to collect taxes, pay basic expenses and avoid a shutdown from January 1st.
But only a proper budget would support reduce France’s deficit and enable key spending such as defense measures needed given the war in Ukraine or promised aid to disgruntled farmers.
Financial markets, ratings agencies and the European Commission are urging France to comply with EU rules on debt limits and prevent France’s borrowing costs from skyrocketing. That would endanger the prosperity of the euro countries.
It is estimated that France’s deficit will reach 6% of its gross domestic product in 2024. Bayrou said on Tuesday the government was targeting a 5.4% deficit this year, with the aim of cutting it to 3% – in line with EU rules – by 2029.
Can the government be overthrown again?
Bayrou’s cabinet relies on a delicate agreement between Macron’s centrist allies and the Republican Party’s conservatives, who themselves together lack a parliamentary majority.
The previous government was in office for just three months before it was toppled by far-left and far-right opposition lawmakers amid a budget dispute.
To avoid a repeat of this scenario, Bayrou is trying to conclude a non-aggression pact with the Socialists so that they will not support future moves to overthrow the new government.
The Socialists said they were open to talks on the condition that they included negotiations on pension reform.
However, the possibility of another vote of no confidence still looms.
The radical left-wing party France Unbowed refused to start talks with the government and has already announced that it will submit a motion of no confidence.
A vote later this week would have little chance of success, as the far right appears unwilling to support such a move in the tiny term.
However, the issue could be raised again in the future budget debate in Parliament, with the outcome even more uncertain.
Why are conversations about pension reform crucial?
The pension reform, which came into force in April 2023 despite mass protests, has gradually begun to be implemented. Additionally, people must work for 43 years to receive a full pension.
The Socialists called on Bayrou to announce a “suspension” of the reform, aiming to lower the age of 64 and introduce specific measures for those who have long careers and engage in certain professions considered strenuous work.
Bayrou did not announce such a move on Tuesday, but his proposal to renegotiate it seems like a hand outstretched to the left.
He suggested that the most criticized age of 64 could potentially be lowered depending on the outcome of negotiations.
“We must not worsen the financial balance of the pension system,” emphasized Bayrou.
On the other side of the political spectrum, the Conservatives had warned against suspending pension changes.
“If we were to repeal the pension reform, the cost would be 3.4 billion euros ($3.47 billion) in 2025 and almost 16 billion euros ($16.3 billion) in 2032,” he said conservative Senate President Gérard Larcher.
Does the extreme right still have influence?
Far-right leader Marine Le Pen – Macron’s fiercest rival – was instrumental in the fall of the previous government.
Bayrou consulted them in forming the new government, and Le Pen remains a powerful force. Her National Rally party is the largest single faction in the National Assembly, the powerful lower house of the French parliament.
In recent days, Bayrou’s government has tried to sideline Le Pen by instead negotiating budget issues with the Socialists, Greens and Communists.
National Rally President Jordan Bardella criticized those talks and warned Monday that his party would reject any budget that would raise the cost of medicines, provide better health care for migrants in the country illegally and impose new taxes on businesses. Such measures would justify a vote of no confidence, he said.
But Le Pen will face problems of her own in the coming months – a court ruling in March over alleged illegal party funding could mean she is barred from running for office.
