Macron Seeks to Drive Pension Reform With Fresh Talks

(Bloomberg) --

French President Emmanuel Macron’s government on Friday held hastily arranged negotiations on the financing of pensions in an effort to secure the backing of moderate unions for his overhaul of the system.

By accepting demands to prepare a conference on financing, the government aims to drive a wedge between unions that have so far orchestrated 37 days of strikes, hitting many sectors and bringing havoc to transport systems of large cities.

While far-left unions are demanding a wholesale rejection of Macron’s reform, their more moderate peers support the overarching plan to replace 42 separate pension systems with one universal, points-based system. They have balked, however, at a measure to finance the system by introducing penalties and bonuses to encourage later retirement.

The government hopes to win the support of moderate unions -- in particular the CFDT, the largest private sector union -- by giving them an opportunity to find alternative financing solutions with the conference in the coming months.

“A quick and satisfactory compromise for everyone is now possible,” Budget Minister Gerald Darmanin said in an interview in Le Figaro ahead of Friday’s talks. “But everyone needs to budge: the government and the unions.”

Crunch Moment

The financing talks are a crunch moment for a critical reform in Macron’s economic program. Like previous overhauls of labor rules, unemployment benefits and tax, the government says the changes to pensions are driven by a push to loosen rules that bind the French economy and challenge the ingrained advantages of some.

The ferocious response of unions has cast doubt on whether Macron can deliver. In addition to continuous strikes -- the longest on record in the transport sector -- opponents have organized protests around the country.

In meetings Friday, the government presented unions with documents showing that setting the so-called pivot age -- when workers could retire with full benefits -- at 64 would generate savings of three billion euros ($3.3 billion) in 2022 and 12 billion euros in 2027, according to Agence France-Presse.

After more than an hour of talks with Prime Minister Edouard Philippe, CFDT General Secretary Laurent Berger said the government must drop all references to the pivot age from its plans for his union to agree to financing talks.

“A blind and unfair measure like this has no place” in the reform, Berger said. “We sensed in his words a willingness to be open, but it will be measured by deeds.”

Protests Ebbing?

The number of people taking to the streets has declined over time. Nationwide, 452,000 joined protests Thursday, down from 615,000 on marches Dec. 17, AFP reported, citing the interior ministry.

Surveys also indicate that French people increasingly expect the government to prevail, even if the strikes continue

An Ipsos poll carried out late on Thursday showed 71% of those surveyed believe the government will push through its pension reforms, up two points from a month ago. Four-fifths also said they expected the strikes to continue for several weeks.

Unions plan more marches, including in Paris as soon as Saturday.

To contact the reporter on this story: William Horobin in Paris at whorobin@bloomberg.net

To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Vidya Root, James Regan

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