Is the pension reform really dictated by Brussels?

Ursula von der Leyen, President of the European Commission, Emmanuel Macron and Charles Michel, President…

Ursula von der Leyen, President of the European Commission, Emmanuel Macron and Charles Michel, President of the European Council, in June 2021, in Carbis Bay, UK.Ursula von der Leyen, President of the European Commission, Emmanuel Macron and Charles Michel, President of the European Council, in June 2021, in Carbis Bay, UK. LUDOVIC MARIN / AFP

Reforming pensions was Emmanuel Macron’s campaign promise. The President of the Republic confirmed it during his wishes for 2023 and the government intends to have it adopted by Parliament in the coming weeks. Why so much energy to pass an unpopular measure? According to some, the decline in the legal retirement age is not only the result of presidential will: it would actually be dictated by Europe.

“The pension reform is a specific recommendation of the Council of the European Union and the government submits to it! »thus accused Nicolas Dupont-Aignan, Debout la France deputy for Essonne, on Twitter, Thursday, January 12. The day before, the deputy of the National Rally, Marine Le Pen, described the government’s project, to the parliamentary press, as a consequence of a “form of blackmail” from Brussels.

This argument echoes a reality: France has made a commitment in recent years to the European Commission to reform its pension system. But it opens up a question worthy of the paradox of the chicken and the egg: does Emmanuel Macron want to reform pensions because Brussels asks him to, or does this ” recommendation “ Is it made for him because he is favorable to it from the start?

WHY IT’S MORE COMPLICATED

Yes, Brussels encourages France to reform pensions

Each year, the Member States of the European Union (EU) endeavor to coordinate their public policies within the framework of the “European Semester”. “If necessary, recommendations are given to them. […] addressed with a view to correcting macroeconomic imbalances”, reads on the website of the Council of the EU.

It is in this context that the Council recommended to France, in 2019, of “reform the pension system to gradually standardize the rules of the various pension schemes, with a view to strengthening the fairness and sustainability of these schemes”.

This commitment is repeated in the French national recovery and resilience plan submitted to the European Commission in 2021. The investments allowed by the European recovery plan “will be accompanied by reforms designed to increase their impact and also support growth potential. Thus, among other things, the reforms undertaken will improve the effectiveness of housing policy, the labor market and unemployment insurance, and, when conditions permit, the pension system.details the text.

There is therefore a link between the French pension reform and macroeconomic discussions at European level.

But nothing formally compels France to do so.

Can we say, however, like Mme Le Pen and Mr. Dupont-Aignan, that the project presented by Elisabeth Borne, Tuesday January 10, is imposed by Brussels? With regard to the economic recommendations of the EU, it should be noted that they are the fruit of discussions between the Member States and the Commission. They are aimed more at achieving major common objectives than at compelling the Member States to adopt specific measures, recalled François Hollande in 2013.

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It is not surprising that the pension reform is mentioned there in 2019, since the file was already on the French agenda: at the time, the government was working on its project for a “universal” pension scheme, buried in March 2020 because of the health crisis.

For the European recovery plan, the situation is somewhat different. France detailed there, like the other Member States, the structural reforms planned in parallel. Very clear commitments are made there, under the name “targets and milestones”. For example, with regard to energy renovation, France has set itself the course to exceed 700,000 MaPrimRénov files (cumulative) in 2022.

Pension reform does not appear in the specific “targets and milestones” of the French recovery plan

The achievement of these objectives is the subject of detailed reports to the Commission before any request for the disbursement of funds. Brussels can therefore in principle assess whether the efforts of the Member States are sufficient or not before reimbursing their expenses. But concerning pensions, only the ambition to reform them is mentioned there, without detailing a specific project or even a timetable. At no time is retirement at age 64 required for France to benefit from European funds. The real test instead took place when Brussels validated the national recovery plans: the Commission considered, at the time, that France’s structural reform program was sufficiently credible to validate its plan.

Still, there is a political issue. In the absence of being legally constrained, France has knowingly undertaken to reform pensions with its European partners. From this angle, the European discussions contribute well to bringing certain issues to a successful conclusion. “The European recovery plan has had concrete effects in this area and has already contributed to the adoption of certain reforms”in Italy, for example, analyzes David Bokhorst, associate researcher at the European University Institute in Florence.

Adrien Senecat

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