French President Emmanuel Macron must push his pension reforms through. It’s either that or see the decline of a great nation.
Those are the high stakes. But we’re seeing just how much of a challenge reform is going to be.
More than 500,000 people took to France’s streets on Thursday to protest Macron’s reform program. The president wants to unify dozens of different pension schemes under a more personalized single program. This would involve retirees receiving higher payments for working longer and vice versa. Macron also rightly wants to end ludicrous early retirement ages and payout schemes. It’s all sensible stuff, as the current system is an incredibly complicated joke. Trying to explain the debate, Le Monde newspaper had to answer 48 different questions!
But the protesters don’t want to answer the hard questions. Instead, they want to continue acting like Marie Antoinette, enjoying unaffordable profligacy at the expense of their fellow citizens and the nation’s finances. They say France should ignore reality and increase taxes. But these aren’t serious options.
France already taxes and spends at world-leading levels. And the result is an economy with an 8.6% unemployment rate, youth unemployment at 19%, and an annual GDP growth rate now hovering between 1% and 1.5%. France’s aging population means pension reform is mathematically nonnegotiable. It is also worth noting here, that the current system advances vested interests before common fairness, exacerbating France’s deep social tensions.
The protesters will keep up their pressure, hoping to paralyze the economy, education system, and transport network. But Macron must maintain his nerve. The young president was elected to address these issues, and he has the parliamentary supermajority to see his will enacted. Although his domestic leadership has oscillated between boldness and overly cautious hesitation, he must know that if he fails here, his 2022 reelection prospects will be truly doomed.
The protesters and Macron will keep marching forward on their divided paths, but Macron will ultimately win.
