Saturday

1st Oct 2016

French strike highlights EU's pension debacle

  • French metro: public transport is expected to grind to a halt on Thursday (Photo: dalbera)

France is bracing itself for a day of chaos as seven unions prepare to strike against government plans to raise the minimum retirement age from 60 to 62 by 2018.

Public transport, air traffic and schools across France are all set to be affected by the 24-hour shutdown on Thursday (23 September), the second such protest in a matter of weeks.

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Organisers hope even more people will take to the streets this time, after at least 1.1 million citizens turned out to oppose President Nicolas Sarkozy's plan on 7 September.

Despite indications he is willing to make marginal concessions, Mr Sarkozy has said he is determined to stick to the blueprint that will also push back the age for those who want to ensure full retirement benefits from 65 to 67.

As French people live longer, the pensions system is set to run up annual deficits of €50 billion by 2020 unless changes are made, the government has warned. Paris is keenly aware that financial markets and Brussels are clamouring for budgetary deficit cuts.

The country's Socialist opposition party continues to oppose the retirement age increase after the pension Bill was passed in parliament's lower house last week, with the fight now set to move to the Senate.

Thursday's strike comes hot on the heels of a new piece of research by insurer Aviva Europe which says European workers need to save €1,900 billion more each year if they hope to retire with pensions that will maintain their current standard of living.

Britain tops the table of under-savers, with its citizens needing to squirrel away an extra €12,300 a year on average if they wish to avoid an old age of reduced financial comfort.

Citizens on the island nation are closely followed by their German counterparts who need to save an extra €11,600, according to the study, followed by the Irish on €9,000, French €7,700, Spaniards €6,900 and Russians on €5,700.

Aviva warns that the problem is more acute for older people who have less time to top up their savings, while European citizens on lower incomes may have considerable difficulty setting aside more money than they currently do.

In a Green Paper in July, the European Commission warned that Europe's pension situation had worsened as a result of the recent financial crisis, suggesting that retirement ages should automatically increase inline with rising life expectancy. This would help de-politicise the decision said the EU executive.

The paper also noted that, whereas currently there are four people of working age for everyone over 65, by 2060, this number will be cut in half.

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