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French President Nicolas Sarkozy speaks to workers at the Montbard Valinox nuclear plant on Friday, Sept 03, 2010.
President Nicolas Sarkozy on Wednesday refused to back down
on pension reforms but offered some concessions.
Sarkozy said he was asking his government to make some
changes to the pension reform bill, but the rise in the minimum pensionable age
would stay. "There is no question of going back on this," Sarkozy
said. "Working a little longer is the most reasonable path."
Trade union leaders have warned of more public
demonstrations against the rise in the minimum retirement age to 62 from 60.
In Germany, Chancellor Angela Merkel's centre-right
coalition plans to start incrementally raising the retirement age from 2012
onwards. By 2029, workers would retire at 67.
Mass protests in France on Tuesday involving
between 1.1m and 2.7m people, prompted Sarkozy
to announce that the government would broaden the
categories of employees who would still
be able to retire at 60, to include
those who began work before the age of
18, those suffering from a partial
physical incapacity and older civil
servants with children.
If the president surrenders on pension reform, the main plank in his
political platform, he will be political toast.
For the rich
countries which dominate the membership of the think-tank for governments, the
Organisation for Economic Cooperation and Development (OECD), rising retirement
and health costs are unsustainable.
The average
legal age of retirement in member countries, is just over 64, but it dips to as
low as 58 in Turkey, 60 in France and to as high as 67 in Norway and Iceland.
Ages can vary between the sexes, with women often entitled to earlier
retirement.
The labour
force exit age - - i.e., the actual average age when people stop
working - - is often higher or lower than the official retirement age. In Korea,
the average man clocks in until he’s over 71 - - more than 11 years beyond
retirement age; by contrast, his counterpart in Austria gives up the daily grind
at about 59, or six years ahead of the official retirement age. In Ireland, the
level is almost in line with the official retirement age of 66.
As regards,
the number of years people spend in retirement on average in OECD countries,
it’s just over 22½ years for women and about 17½ for men, who tend to work
longer and die younger. For women, the longest retirements are in France,
where retirement stretches on for about 27½ years; France also holds the OECD
record for men - - 24 years spent in retirement, compared with just over nine
in Mexico.
Currently
French men retire at 59; so a male could enter the workforce at 24, retire after
35 years and be a ward of the state for a total of 48 years!
The European Commission
says that by 2050 the percentage of Europeans older than 65 will almost double.
From 7 workers for every retiree in the 1950s, by 2050, the ratio in the EU will
drop to 1.3 to 1.
Up to two million people are
taking to the streets Tuesday in France to protest against a reform which would
see the age of retirement in the country change from 60 to 62 years old.
”This measure is not enough to rebalance the system, the unions want some sort
of taxation,” Philippe Brossard, president of Macrorama, told CNBC:
The New York Times says
gross public social expenditures in the European Union increased from 16% of GDP
in 1980 to 21%, compared with 15.9% in the United States. In France, the
figure now is 31%, the highest in Europe, with state pensions accounting for
more than 44% of the total and health care, 30%.
Sarkozy is trying to fix a deficit in France's mandatory state pension
system. The system has been under pressure for several years, because French
people are living longer and thus spend more time drawing pensions. But the
deficit widened after last year's recession causing a sharp drop in payroll-tax
collection. The shortfall for 2010 could reach €32bn and €42bn by 2018.
The government has estimated the cost of
Wednesday's concessions at €1bn a year. The CGPME, France’s federation of small
businesses, said the exemptions could
allow 20% of employees to
continue to retire at 60 and be more
expensive than thought.
Socialist party leader, Martine Aubry known as
Miss Thirty-Five-Hour-Week, for cutting weekly work hours when she was in
government, opposes reform.
