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French govt narrowly survives no-confidence vote but faces more challenges (Update)

french government's pension reform bill at the national assembly in paris
Demonstrators on the place de la Concorde near the National Assembly

Protesters set piles of rubbish on fire in central Paris on Monday after President Emmanuel Macron’s government narrowly survived a no-confidence motion in parliament on Monday over a deeply unpopular pension reform.

The failure of the no-confidence vote will be a relief to Macron. Had it succeeded, it would have sunk his government and killed the legislation, which is set to raise the retirement age by two years to 64.

But the relief proved short-lived.

In some of Paris’ most prestigious avenues, firefighters scrambled to put out burning rubbish piles left uncollected for days due to strikes as protesters played cat-and-mouse with police.

Earlier on Thursday, a Reuters reporter saw police fire tear gas and briefly charge at protesters after the no-confidence vote barely fell short of enough votes to pass.

Unions and opposition parties said they would step up protests to try and force a u-turn.

The vote on the tripartisan, no-confidence motion was closer than expected. Some 278 MPs backed it, just nine short of the 287 needed for it to succeed.

Opponents say this shows Macron’s decision to bypass a parliamentary vote on the pension bill – which triggered the no confidence motions – has already undermined his reformist agenda and weakened his leadership.

As soon as the failure of the no-confidence vote was announced, lawmakers from the hard left La France Insoumise (LFI, France Unbowed) shouted “Resign!” at Prime Minister Elisabeth Borne and brandished placards that read: “We’ll meet in the streets.”

“Nothing is solved, we’ll continue to do all we can so this reform is pulled back,” LFI parliamentary group chief Mathilde Panot told reporters.

MORE STRIKES TO COME

In the southwestern city of Bordeaux, about 200-300 people, mostly youngsters, gathered against the reform and chanted: “Macron, resign!” A couple of trash bins were lit on fire as the crowd chanted: “This will blow up.”

Over the past three nights, clashes over the pension reform, in Paris and throughout the country, have been reminiscent of the Yellow Vest protests that erupted in late 2018 over high fuel prices.

A ninth nationwide day of strikes and protests is scheduled on Thursday.

“Nothing undermines the mobilisation of workers,” the hardline CGT union said after the vote, calling on workers to step up industrial action and “participate massively in rolling strikes and demonstrations.”

Opposition parties will also challenge the bill in the Constitutional Council, which could decide to strike down some or all of it – if it considers it breaches the constitution.

A second motion of no confidence, tabled by the far-right National Rally (RN), also failed, after it gathered only 94 votes. Other opposition parties said they would not vote for it.

Far-right leader Marine Le Pen said Borne should go. She said Macron should call a referendum on the reform but was unlikely to do so. “He’s deaf to what the French people want,” she told reporters.

What’s in France’s pension reform?

WHAT’S IN THE PLAN?

  • Retirement age pushed back by two years to 64. The change will be gradual, increased by three months per year from September, until 2030.
  • From 2027, workers will have to make social security contributions over 43 years rather than 42 years in order to draw a full pension. The additional year was already foreseen in a 2014 reform but Macron is accelerating the pace of transition.
  • Guaranteed minimum pension income of not less than 85% of the net minimum wage, or roughly 1,200 euros per month at current levels, for new retirees. After year one of retirement, the pensions of those receiving a minimum income will be indexed to inflation. The government expects to recalibrate upwards the incomes of those already receiving the lowest pensions. Public workers in jobs deemed physically or mentally arduous will maintain the right to early retirement, though their retirement age will be increased by the same number of years as the wider labour force. Police officers, sewer cleaners, prison guards and air traffic controllers are among those currently able to retire at 52.
  • The end to a grouping of a dozen so-called ‘special regimes’ with different retirement ages and benefits that currently cover, among others, rail workers, electricity and gas workers and central bank staff. This change will only apply to new entrants to the labour market. Existing workers in these sectors keep hold of their perks. However, the ‘special regimes’ covering seafarers and Paris Opera House performers survive.
  • A ‘Seniors Index’ modelled on France’s gender equality index and which would measure the progress made by companies vis-a-vis the training and recruitment of seniors.

WHAT IMPACT?

  • Boost the employment rate among 60-64 year-olds. In France, the employment rate in this age category is just 33% compared with 61% in Germany and 69% in Sweden.
  • The pensions of the poorest 30% will increase by 2.5%-5%, according to the government.
  • Gross savings of 17.7 billion euros per year by 2030.
  • Balanced pension budget by 2030. Existing forecasts without any reform show a pension budget deficit of 13.5 billion euros in 2030.
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