France’s new PM plans renegotiation of contested move to raise retirement age

14 January 2025, 16:04

New French Prime Minister Francois Bayrou outlines his top priorities in a speech at the National Assembly in Paris
France Politics. Picture: PA

Francois Bayrou outlined his top priorities in a speech to politicians in the National Assembly in Paris.

France’s new prime minister Francois Bayrou has announced the renegotiation of a contested plan raising the retirement age from 62 to 64, in a crucial move to seek more stability for his minority government.

In his first address to legislators at the National Assembly, Mr Bayrou said: “I’m choosing to put this subject back on the agenda, with the social partners, for a short time and under transparent conditions.”

Mr Bayrou vowed to seek “a new path of reform, without any totems or taboos, not even the retirement age”, as long as the financing for the changes is guaranteed.

Legislators listen to French Prime Minister Francois Bayrou delivering his general policy speech at the National Assembly in Paris
Legislators listen to French prime minister Francois Bayrou delivering his general policy speech at the National Assembly in Paris (Thibault Camus/AP)

President Emmanuel Macron’s plan to raise the retirement age from 62 to 64 unleashed months of mass protests from January to June 2023 that damaged his leadership.

Mr Bayrou also outlined other top priorities, including key budget decisions, one month after he was appointed by Mr Macron.

The prime minister urgently needs to pass a budget bill for 2025.

Following the collapse of the previous government, an emergency law has been approved to enable the state to levy taxes from January 1, pay basic expenses and avoid a shutdown.

But only a proper budget would help reduce France’s deficit and allow key expenses such as defence measures needed amid the war in Ukraine or aid promised to angry farmers.

Financial markets, ratings agencies and the European Commission are pushing France to comply with EU rules limiting debt and keep France’s borrowing costs from spiralling.

That would threaten the prosperity of eurozone countries.

France’s deficit is estimated to reach 6% of its gross domestic product in 2024.

French prime minister Francois Bayrou arrives to deliver his general policy speech meant to outline his top priorities at the National Assembly in Paris
French prime minister Francois Bayrou arrives to deliver his general policy speech meant to outline his top priorities at the National Assembly in Paris (Thibault Camus/AP)

Mr Bayrou on Tuesday said the government was aiming for a deficit of 5.4% this year, with the goal to reduce it to 3% – in line with EU rules – by 2029.

“Major spending cuts will be proposed,” he said, without providing concrete details.

The pension reform, which was enacted into law in April 2023 despite mass protests, has gradually started being implemented.

The Socialists urged Mr Bayrou to announce a “suspension” of the reform with the aim of backtracking on the age of 64 and introducing specific measures for those who have long careers and certain professions considered to be hard work.

Mr Bayrou on Tuesday stopped short of announcing such a move, yet his proposal to renegotiate the measure appears as a hand stretched out towards the left.

The new prime minister wants to secure a non-aggression pact with the Socialists so that they would not support any future move to topple the new government.

He suggested the age of 64, which was the most criticised change, could possibly be decreased depending on the outcome of the negotiations.

Press photographers focus on French prime minister Francois Bayrou delivering his general policy speech at the National Assembly in Paris
Press photographers focus on French prime minister Francois Bayrou delivering his general policy speech at the National Assembly in Paris (Thibault Camus/AP)

“We cannot deteriorate the financial balance” of the pension system, Mr Bayrou insisted.

On the other side of the political spectrum, the conservatives have warned against any suspension of the pension changes.

“If we were to repeal the pension reform, the cost would be 3.4 billion euros (£2.8 billion) in 2025 and almost 16 billion (£13.5 billion) in 2032,” the president of the senate Gerard Larcher, a conservative, said.

Mr Bayrou said a so-called “conclave” with representatives from workers’ unions and employers’ organisations would be aimed at negotiating for three months with a strict deadline for a potential deal.

If they were to agree on pension changes, the proposals would be introduced into law.

Otherwise, Mr Macron’s initial plans would apply, he said.

Mr Bayrou’s cabinet relies on a fragile deal between Mr Macron’s centrist allies and conservatives of The Republicans party who even together have no parliamentary majority.

The previous government was in place for only three months before being brought down by opposition legislators from both the left and the far right amid a budget dispute.

Former French president Francois Hollande gestures as he listens to French Prime Minister Francois Bayrou delivering his general policy speech at the National Assembly in Paris
Former French president Francois Hollande gestures as he listens to French Prime Minister Francois Bayrou at the National Assembly in Paris (Thibault Camus/AP)

This time, the Socialists said they are open to talks with Mr Bayrou on the condition that they include negotiations on the pension reform.

However, the possibility of another no-confidence vote is still looming.

The hard-left France Unbowed party refused to enter into talks with the government and already announced it would file a no-confidence motion.

A vote later this week would have little chance of succeeding as the far-right appears unwilling to support such a move in the immediate term.

Yet the question could be raised again during the future budget debate at parliament, with more uncertainty on the result.

Far-right leader Marine Le Pen – Mr Macron’s fiercest rival – was instrumental in ousting the previous government.

Mr Bayrou consulted her when forming the new government, and Ms Le Pen remains a powerful force.

French far-right leader Marine Le Pen at the National Assembly in Paris
French far-right leader Marine Le Pen at the National Assembly in Paris (Thibault Camus/AP)

Her National Rally party has the largest single group in the National Assembly, France’s powerful lower house of parliament.

In recent days, Mr Bayrou’s government sought to sideline Ms Le Pen by negotiating instead with the Socialists, the Greens and the Communists on budget issues.

The president of the National Rally, Jordan Bardella, criticised those talks and warned on Monday that his party would oppose any budget that would raise the cost of medication, provide more healthcare for migrants staying illegally in the country and impose new taxes on businesses.

Such measures would justify a no-confidence vote, he said.

But Ms Le Pen faces her own headaches in the months to come – a March court ruling over alleged illegal party financing could see her barred from running for office.

By Press Association

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