How do French retirees really live? | | Business and economic news

French President Emmanuel Macron has announced after months of protests, violent clashes with police and a government accused of betraying the constitution. most dramatic change To the national pension in one generation.

Until recent reforms, French workers were legally allowed to retire at age 62. Macron raised that age to 64.

Historically, pensions have been a major political flashpoint in France, and this current showdown between government and workers follows. Unstable as usual.

“Every country has a sacred cow,” Professor Nicholas Barr of the London School of Economics European Institute told Al Jazeera. “In France, changing your pension age is a very sacred cow.

“To give another example of a sacred cow, in the United States we only mention public involvement in health care when we instantly hear the cries of ‘communism’ and ‘socialism. In the UK, bringing the slightest hint of a private delivery to the National Health Service immediately raises cries that it betrays all principles of the NHS.

“And in France, the third rail equivalent to this is pension age. In my view, it is totally unsustainable.”

France has the lowest eligibility age for public pensions among European countries and spends a lot of money to support the system.

This is especially true for young workers in the public sector, such as education, transport and energy, who pay higher than average taxes and earn lower wages, but find that they are rewarded by leaving their jobs relatively young. It is based on the “prepaid” assumption that New generations are living in good health and in equal comfort because they have the public funding to do so.

There are exceptions to this system, such as farmers and farmers who are classified as self-employed and generally belong to the private sector on private farms. This means that only a portion of the public pension is available, despite its importance to French society.

Pension programs are currently facing financial challenges due to demographic changes (an aging population and significantly lower fertility rates), straining the finances of the system.

France vs. Its Neighbors

So do French pensioners do better than pensioners in other developed countries? It depends on who you ask and what measure you use.

A relatively early retirement age may be enviable, but in terms of total monthly payments, the average monthly public pension in France is around €1,200 ($1,327), compared to Spain’s €2,500 ($2,764), It is significantly lower than many of its neighbors, such as Belgium’s €3,000. ($3,317) and €3,300 in Luxembourg ($3,649). His two are relatively cheap to live in, so the French retirement system doesn’t look so rosy against literal neighbors.

But with a lower cost of living than Nordic countries such as Denmark, Norway and Iceland, and higher pension payments than most of Eastern Europe, Ireland and the United Kingdom, France lives better than the rest of Europe. In fact, he ranks 7th on the Breakeven Pension Index, a weighted table compiled by Almond Financial, a financial planning firm. In effect, French pensioners have a fairly healthy monthly income and can live cheaper than most other Europeans.

There is also the cultural aspect. French workers often see retirement as a true “chapter 3” of their lives, rather than an afterthought, and therefore feel it is worth leaving the workforce at a relatively young age.

system in numbers

French public sector employees generally receive higher pensions than private sector employees, with an average age of 62.9 by 2021, according to European Commission data.

The legal retirement age varies across Europe. Germany, Italy and Denmark have 67, while Spain has 66 (rising to 67 in 2027). In the UK, the current retirement age for public pensions is also 66 for him, and Prime Minister Rishi Sunak has hinted that he may push to raise it to 68.

On average, European Union residents retire at 63.8, while Luxembourg has the lowest average retirement age of 60.2.

Then there is the amount of money that the government sets aside for pensions.

As a percentage of gross domestic product (GDP), France puts an average of 14.8% into pensions, according to the OECD. In the EU, only Greece (15.7%) and Italy (15.4%) contribute more money. The European average is 11.6%, with Poland devoting 10.6% of her GDP to pensions, ahead of Germany’s 10.3% and Romania’s 8.1%, while Ireland is at the bottom with her 4.6%. The UK figure is 5.5% of hers, according to London’s Office of Budget Responsibility.

“There is a strong cultural attachment to national pensions and quality of life, which the French value not only in terms of length of service, but also in terms of hours worked per week, number of holidays per year, etc.,” says Rainbow Murray. Professor of International Relations at Queen Mary University London, told Al Jazeera. “Retirement is seen as a right at an age and financial level where you can enjoy it.”

Liberte, Egalite… Realite

But the perception of France’s pension system is tricky, says Paul Smith, an associate professor of French history and political science at the University of Nottingham.

“The generosity of the French system is a myth. .

“But that’s because the French government has a bigger burden in terms of contributions and payments.”

However, the number of people receiving full pensions is far less than you might think. At €1,200 ($1,327) per month, the basic pension is like a chimera.

“The problem is that many French people actually live on wages not much higher than the minimum wage. It is out of the question to pay the

Why such a violent reaction?

Observers can’t help but feel a line has been crossed, even as Macron and his ministers claim they will be given “100 days of appeasement, unity, ambition and action” to heal the country. can’t

“Macron has broken ties with the unions and they don’t seem willing to join the negotiations any time soon,” Smith said.

Barr adds: It’s crazy design for sudden and drastic changes, especially for people nearing retirement. ”

But was this course of reform a fundamental and necessary step to prevent the system from collapsing?

“Very so,” said Burr. “Italy is a very sad example of the neglect of this issue. Various governments have paved the way for more than 30 years until embarrassment struck fans, but the government of Mario Monti in 2011 turned the country on its head. We had to reform very radically and quickly to avoid bankruptcy,” he said.

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