David A. Andelman
An American visitor to Paris emailed me after her stroll Thursday night: “I was walking home from dinner in rue du Cirque when I saw the cars on fire. At Rue Royale, they were hurling tear gas. To get to my hotel in the Rue des Capucines, the street was on fire from both ends! Is Paris burning? In my street YES!! Now in my room I can smell smoke.”
France is burning – Paris particularly, the city that is already gearing up to host next year’s Summer Olympics. And the nation’s hitherto Teflon president appears caught in the middle of a host of competing political currents and the nation’s fiscal realities. But don’t count Emmanuel Macron out – not yet. Not that his most die-hard political opponents aren’t circling on all sides across the vast French political spectrum.
From the far-right acolytes of Marine Le Pen to the far left of Jean-Luc Mélenchon’s La France Insoumise (unbowed) party, the political sharks are all smelling blood on the water, even though the next elections aren’t for another four years. At issue is Macron’s decision that the nation needs to bite the bullet and raise the national retirement age from 62 to 64 years – which would still leave it in the lower half of European Union nations. At the current 62 years, only Slovenia at 60 is lower. In the 13 years since the retirement age in France rose to 62 from 60, the average life expectancy has also risen by two years to 83 from 81, according to UN population figures.
Not surprisingly, the moment of the first announcement of tweaks to their treasured pension system two months ago, the French began to protest. When the measure reached the halls of Parliament, the nation took to the streets in earnest, walking off their jobs in a time-tested manner that has all too often proved both utterly disruptive to life and at the same time somewhat successful in moderating political behavior – as the case has been since mass student protests in 1968 down to the yellow vest movement more than four years ago. Buses, subways and public works across France shuddered to a halt, barricades went up in streets and were set ablaze. Garbage collectors walked off, protesting the rise in their retirement to 59 from 57 – among the many exceptions for earlier full retirement due to the nature of their jobs. More than 7,000 tons of garbage have piled up on the streets of Paris – a pungent smorgasbord for the city’s rat population that, among the world’s most prolific, is said to be thriving.
Of course, this is not the first such conflagration Macron has weathered. The yellow vest movement sent French demonstrators into the streets, troubled by rising fuel prices. Macron calculated, rightly, that the French eventually lose patience with extended strikes and unrest. That worked before. Macron met with union leaders, addressed the nation, laid out the costs and dropped fuel taxes that were a core of the protests. It’s not unreasonable Macron could find a similar path out of this crisis, though the stakes are higher. But pensions have long been a flashpoint for the French who are congenitally reluctant to give up any of a host of such traditional perks, some tracing back to the time of Louis XIV in the 17th century. Dancers in the Paris Opera can still retire with full pension at age 42. Much of today’s current pension structure dates to the post-World War II rule of Charles de Gaulle.
Ironically, it was de Gaulle who also provided Macron with the tools – dangerous though they might be to his political future – to ram through the pension reform that he believes is vital to the survival of the French economic system. The constitution that de Gaulle insisted upon as a condition for him to return to office in 1958 and rescue the country from a morass of weak, revolving-door governments, contained Article 49.3. It gives the French President the right to push a bill through the National Assembly without submitting to a vote. The provision has been invoked on 100 occasions since its establishment, according to official records of the French republic. As it happens, it has already been invoked 11 times under Macron’s prime minister, Elisabeth Borne, more times than under any of her 15 predecessors except for one – Michel Rocard, who used 49.3 some 28 times against an utterly hostile Parliament. Even de Gaulle’s three prime ministers only invoked the provision 10 times in 10 years. This same Article 49.3, however, carries with it a potentially guillotine-like provision. The opposition filed two no-confidence motions against the government – one by the Le Pen faction and the other by a coalition of moderates.
Both were defeated on Monday, clearing the way for Macron’s pension reforms to be implemented. The broader centrist motion failed by just nine votes out of 577 members of Parliament, while Le Pen’s motion won only 94 votes. The prime minister and her government will continue in power. Macron, of course, does have the right to dissolve Parliament and call for another election. His presidency is secure for another four years. By using the constitution, Macron bestowed a marvelous gift on his own plurality, indeed really any members of Parliament who might have even considered voting for the pension reform, by removing the need for them to declare themselves publicly for a deeply unpopular piece of legislation. While the President is term-limited out of standing for election again in four years, members of the National Assembly must go before voters. In theory, this gives enormous power to the political extremes – supporters of Le Pen and Mélenchon, respectively on the far right and extreme left – to shape any future government or even stand for election themselves on a platform that much of the French people seem to embrace wholeheartedly: no pension reform, or even a rollback to a 62-year retirement age.
There still remains an appeal to the nation’s constitutional council, which opponents have immediately filed. The moment the vote was announced, demonstrations broke out across Paris, with tear gas being launched by police. And opponents have threatened a nationwide general strike for Thursday that would shut down the country. But the fundamental question remains: Would France do better with its status quo, a retirement age of 62? Not at all, in my view, nor in Macron’s. The President is quite correct in pointing to the strains going forward on the entire national budget. When the Fifth Republic was created in 1958, there were more than four workers for every retiree. By 2020, that figure had fallen to 1.7 workers per retiree, and over the next decade, without an adjustment an increasingly aging population will be relying on barely 1.5 workers to fund each retiree’s pension. The nation will likely be going increasingly into deficit, or taxes will be forced to skyrocket. France already spends 14.5% of its gross domestic product on pensions, nearly double the 7.5% in the United States. The French budget deficit of 5% of GDP is already nearly double the EU target of 3%. And facing the war in Ukraine, Macron still wants to boost the nation’s military budget beyond the somewhat anemic 1.9% today.
For Macron and France’s partners and allies, the stakes may be even higher. Once seen as the new leader of a united Europe, stepping into that role with the departure of Angela Merkel, the powerful former German chancellor, Macron is now mired in controversy at home. Still, he and his success or failure to reform his nation’s pension system could be a test case for a host of other countries facing aging workforces and widening deficits.