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France Poised to Raise Retirement Age

Expectations are growing that France is set to remove the right to retire at 60, as it embarks on a contentious reform of its debt-laden pension system and brings public finances back into line.

AP

Christian Estrosi, industry minister, said on Sunday the government was “leaning towards an increase in the [retirement] age” in its talks with unions and employers’ federations, despite denials from cabinet ministers over the weekend of a decision being taken.

Although there has been much speculation that France’s legal retirement age of 60 – one of the lowest in Europe – would be abandoned, Mr Estrosi’s comments on national radio are the clearest statement yet of government intentions.

His comments are likely to give ammunition to unions planning a national strike on Thursday to protest against spending cuts and pension reforms.

The government is expected to announce its planned reforms next month and expects to have a draft bill before parliament by September. Nicolas Sarkozy, president, has made pensions the last big reform of his government before the campaign for the next presidential election in 2012 gets under way.

All but one of France’s five main unions have rejected suggestions that the retirement age should be increased, favouring instead taxes to fill a deficit expected to hit €32bn this year, as much as €45bn in 2020 and possibly more than €100bn in 2050.

The government is highly sensitive to the potential of pension reform sparking widespread unrest and will be watching Thursday’s protest closely. Former prime minister Alain Juppé was eventually brought down by national protests in 1995 when he attempted to restructure one of the most generous pensions systems in Europe.

However, there are signs of opinion shifting and the government may be hoping to take the opportunity presented by the Greek crisis to convince the public of the need for reform. A survey last week showed two-thirds of those questioned believed the pension system was in danger of collapse.

A similar percentage of respondents agreed that the retirement age needed to be raised from 60 to 62.

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