Trust and transparency missing from Macron’s pension reforms
With thousands of flights and trains canceled and traffic jams exceeding 600 km just in the capital Paris, France has seen its worst lockdown in more than 25 years, as millions of workers — in both the public and private sectors — began a strike last week against the pension reforms planned by the government. Though initially it was meant to be a day-long affair, the unions have since declared they will carry on the strike for at least a week, or for as long as the government does not pay heed to the “voice of the people from the street.”
The matters will come to a head when Prime Minister Edouard Philippe this week introduces the pension reform legislation, which is a flagship project of President Emmanuel Macron. The unions have threatened to intensify their action if the government goes ahead with the move. The dispute is critical for France, its government and definitely the people. Macron has spent three years talking of this move, saying that France offers by far the most generous pensions in the developed world and that these are no longer sustainable as society ages and the economy changes.
On the face of it, the government does have a point. Certain public sector workers, notably train drivers, fire fighters and policemen, can retire as early as 52 years of age and public utility workers at 57, compared to most private sector workers only retiring at 62. In all, France has about 42 different pension systems, with a fair bit of variation in the terms as well as benefits. With an aging population, the French pension system — already the most generous in the EU — costs about 14 percent of the nation’s gross domestic product and is likely to hit an annual shortfall of €19 billion ($21 billion) within the next five years.
Macron says he wants to create a unified system that would be fair to all and not have special treatment for certain public sector jobs. The unions are opposing the reforms, saying that applying any change to the working conditions of employees retrospectively would be a violation of the worker’s rights. The workers also accuse the government of trying to push through the reforms while keeping them in the dark about the details.
Public opinion is very curiously placed on the issue. More than half of the French agree that the current system is economically unviable. However, more than 74 percent blame the government for the current stalemate and disturbances, saying it has failed to communicate its plans for the pension reforms in a clear and transparent manner and that workers are right to be worried about their future.
The unions also accuse the government of not coming clean with the details of the proposed reforms and instead trying to rely on the brute force of the majority that Macron’s La Republique En Marche party enjoys in the French Parliament to push the reforms through. They say the government should instead hold broad consultations with the people who would be most affected by the reforms.
If poor communication is the main factor behind the large public support for the striking workers, then this would not be the first time Macron has stood accused of being in an ivory tower and out of touch with the people that put him in the Elysees Palace in the first place. Right from the time he was elected in May 2017, Macron’s missteps and insensitive remarks have earned him the reputation of being the bankers’ and businessmen’s president, instead of the people’s president he promised to be.
The same charges were hurled at Macron and stuck to him when the “Yellow Vest” movement began last year. This movement was opposed to his style of governing and taking decisions or making comments that smacked of being elitist, against the interests of the common French, while his rich banker friends stood to benefit by his largesse — for example, removing wealth tax and cutting other taxes for big businesses.
Macron is not the first French president to struggle in pushing through pension reforms. These have been pursued, with varying degrees of commitment and intensity, by several of his predecessors, but all had to throw in the towel in the face of strong opposition. Though the power of unions across the developed world, including France, has declined, the current strikers can take heart from the fact that the first day of the current walkout saw more workers on the streets than the biggest strike in postwar French history, which took place in 1995.
The workers accuse the government of trying to push through the reforms while keeping them in the dark about the details.
Ranvir S. Nayar
Macron and his right-hand man, Philippe, have tried to allay fears about a radical drop in the pensions of public sector employees, but their reassurances have so far failed to cut much ice. The French president ought to take a lesson from neighbor Germany, which enjoys much better labor relations thanks to its unique system of having union representatives on the supervisory boards of large and very large firms, with nearly a third of the total seats on these boards reserved for the workers’ representatives.
Moreover, Germany had already taken the first steps toward pension reform way back in 1992, barely two years after a rather painful merger with the communist East Germany. Since then, the system has been tweaked frequently, including once last year, but the moves passed almost unnoticed as the workers and the government, as well company executives, have built a relationship based on a fair degree of trust and transparency.
Both the Elysees Palace and the French corporate boardrooms could do with a healthy dose of both these elements — trust and transparency — in order to undertake the reforms that are badly needed.
- Ranvir S. Nayar is the editor of Media India Group, a global platform based in Europe and India that encompasses publishing, communication and consultation services.