While the latest report from the Pensions Orientation Council published this week considers that the recent reform will be insufficient to bring pensions back into the green by 2030, increasingly harsh criticism is falling on this body, which is supposed to give a independent diagnosis on the state of health of the system. Problem of methodology, baroque assumptions, independence of its members called into question… For the ex-banker Jean Peyrelevade – architect of the turning point of rigor in 1983 – who continues to denounce the denial of reality of a large part of the class policy on the real situation of public finances, the COR must simply be dissolved. Sharp interview.
L’Express: Are you surprised by the new COR report, which estimates that despite the pension reform, the system will be “sustainably in deficit”?
Jean Peyrelevade: Not really. This confirms that the COR is not a trustworthy body. We put at the center of the debate an institution that spends its time varying its hypotheses, its perimeters of study, according to the interests that are represented within it. The COR should be replaced by a truly independent body. We need an institution that makes forecasts on the evolution of the pension burden over time, according to the evolution of demography and the percentage of assets. Experts capable of doing this in good faith will be easily found. But today, it suffices to discover the composition of the COR to see explicitly its non-independence. Out of 41 members, 16 represent the social partners. 6 of them represent employers, 10 traditional unions. Already, these 16 clearly have interests to defend. I would not like to be outrageous, but I think that the 10 trade unionists took part in the battle for pensions when they must work to establish an independent diagnosis. Then you have 8 parliamentarians who are also involved in drafting the law. There are 9 representatives of the administration who, by definition, are not independent. In reality, you only have 6 truly independent qualified personalities. We make fun of the world!
According to you, the COR has never described the reality of the situation, by voluntarily erasing from the need for financing all the public plans, very deficit…
Normally, if it was a serious organization, it would have taken on all the pension costs. The total amount of expenditure is 345 billion euros. Which are financed by contributions or taxes. When you do the subtraction rigorously, as Jean-Pascal Beaufret has just done in the magazine Commentaire, you arrive at a difference of 71 billion euros. That is public debt.
“There is an urgent need to create a truly independent body, made up of serious economists and demographers”
There is an extraordinary quote from COR Chairman, Pierre-Louis Bras, who at the beginning of the year before the Finance Committee defended himself on the possibility of a hidden deficit of 30 billion, explaining that he was simply repeating the data provided by the government. “If there were 30 billion euros hidden, they would be hidden by the Government when it transmits to Parliament the documents relating to the social security financing law, and this with the complicity of all the parliamentary groups” declared -he. Conclusion: we are in balance and nothing is the responsibility of the COR… We really have an organization that cannot stand up. On such a central subject, and which will become essential for demographic reasons, it is urgent to create a truly independent body, made up of serious economists and demographers.
But did you expect this turnaround to happen so quickly?
I feel the COR has started to respond to some criticism. Compared to the previous report, it has integrated not the deficit of the public service as a whole, but that of local authorities and the hospital service. The figures are therefore a little less false than before, even if the biggest is still missing, namely the civil servants of the State.
“Everybody did cover up, in what people thought was in their interest”
Today, is the pension reform adopted a few weeks ago and which postpones the retirement age to 64 years old already obsolete?
Of course it is insufficient. We have before us a huge public finance deficit. This is all a very bad joke.
Who benefits from this denial of reality?
To no one. We have engaged in a gigantic social battle. Hyper mobilized unions have taken the most favorable hypotheses of a COR, which reasons askew. The state has concealed the real figures, which I don’t understand. If he had, it would have given him justification. I fear that the State has managed this reform with a permanent concern to conceal the imbalances in public finances. Recognizing that pensions represent a burden on the public debt of 70 billion per year is probably too much for them. Because it shows how badly the finances are managed.
In other words: everyone hid, in what people thought was in their interest. They engaged in a bloody battle over fake numbers. It is an explicit illustration of what I called in my book the denial of reality. This battle over pensions is an absolute illustration of this.
When will the subject come back on the table politically? In the next presidential election?
Necessarily. We will have to find solutions. But, at the same time, if we had a serious government, we would begin to focus on the employment rate, because that is still the best solution to this problem. And we would stop talking nonsense about the part of our immigration that corresponds to an economic necessity. That this reality is swept away by almost all political forces, and in particular the classic right, amazes me. That we oppose irregular and illegitimate entries, I understand that. But that we place in the same bag the entries into our territory of students, which represent the largest share in volume, and that we continue to put up barriers to the entry of workers that we need, that’s is absolute stupidity. The far right and the right accumulate nonsense on this subject. And the left says nothing. We could at least explain to the French that there are different forms of immigration. We have every interest in keeping the foreign students who come to us. There are a whole bunch of professions for which it has become impossible to recruit, when we need them.
Is there also a denial for funded retirement?
Of course. We should at least talk about it. Personally, I don’t like individual capitalization very much, the only one to develop a little today. I prefer forms of collective capitalization. Especially since it exists for civil servants. As a former civil servant, I benefit from what is called the “Préfon-retraite”. But who says it? Obviously, as there is the term “capital” in “capitalization”, it is necessarily frowned upon in France.