Macron Is Wrong to Back Away from Pension Reform

French pensions are too generous. The pension system is too expensive.

Boris Johnson Emmanuel Macron
Prime Ministers Mario Draghi of Italy and Boris Johnson of the United Kingdom speak with President Emmanuel Macron of France and Chancellor Olaf Scholz of Germany during a NATO summit in Brussels, March 24 (10 Downing Street/Andrew Parsons)

Emmanuel Macron has suggested he could water down French pension reforms in a second term.

“I am clearly opening the door” to a retirement age of 64, he told BFM TV on Monday, adding that “65 years old was not a dogma.”

Germany and the Netherlands are raising their retirement ages from 65 to 67.

Macron also hinted he might call a referendum on the changes. “I don’t want to divide the country.”

What happened to the brave reformer?


Macron’s about-face is an obvious bid for the support of left-wing voters he will need to defeat Marine Le Pen in the presidential runoff on April 24.

Jean-Luc Mélenchon, the far-left candidate who placed third in the opening round on Sunday with 22 percent support, has called for a reduction in the pension age from 62 to 60.

On average, French women retire at 60 and men at 61. In the EU, only Belgians and Greeks retire earlier, even though life expectancy in all three countries is between 81 and 83.

But French women who interrupt their careers to raise children, and stop paying into a pension plan, sometimes have to work into their late 60s.

Workers in state-owned transport and the police, by contrast, are allowed to retire in their mid-50s. Their pension funds are chronically loss-making (no wonder!), requiring public money to make up the difference.

Too expensive

France spends almost 14 percent of its GDP on public pensions, double the share of other wealthy nations.

Partly that’s because French pensions are so generous. Partly it’s because they’re expensive to manage. France has 42 public pension programs, ten for the state railway alone. (Not counting private, supplemental insurance plans.) Macron would merge them into a single, points-based system, which would cut administrative costs and make it easier for workers to switch jobs and take time off to raise children.

Reforms would not apply to anyone in or close to retirement. There would be a fifteen-year transition to the new system.

The only concession Macron has made that would be reasonable is still allowing early retirement to those in physical jobs, especially if they started work at a young age. Those are the people who tend to have the lowest life expectancy.

But raising the retirement age to just 64 or allowing myriad pension programs to survive (trade unions would certainly urge their members to vote against abolishing them in a referendum) would be a mistake.