The Pensions Guidance Council (COR) is publishing its annual report this week in which it makes a financial assessment of the reform: the system will remain slightly in deficit by 2030 despite retirement at age 64. The situation will remain particularly degraded for the pensions of civil servants. The reform carried out by the government was necessary and insufficient. Our country will therefore undoubtedly have to go through at least one other reform, even one limited to the civil service, within fifteen years.
May this evaluation therefore give us the opportunity to reflect on what went wrong this time around. Let’s start by eliminating two fallacies. The first consists in seeing in this reform and the turmoil it has caused a democratic crisis which, according to the terminology used with great force in the media, “will leave traces”. We can doubt it. Those who have observed the social life of our country for a long time know that pension reform is the one that consumes the most political capital. Ask Alain Juppé, who tried to make one in 1995, or Eric Woerth, who succeeded in 2010 but at a high political cost. Admittedly, our country has experienced major demonstrations and strikes this winter, but no more than during previous reforms. The rise in violence during the demonstrations has nothing to do with pension reform but is part of the process of “decivilization” exogenous to our economy. Let’s not pass off a public order crisis as a democratic crisis. The reform is voted and promulgated. She is about to apply. The democratic process of the vote used all the subterfuges made possible by the Constitution, not because of the conversion of the majority to social fascism, but because it does not have an absolute majority in the Assembly. In short, everything is pretty much normal.
The second sophism consists in agitating a “defect of pedagogy”. Here again, one can doubt the argument. On the one hand, most of the economic and social reforms in France, pensions of course, but also the reform of labor law – let us remember the Labor law, moreover excellent, proposed by Myriam El Khomri under the five-year term of François Hollande – arouse resistance independently of the quality of the pedagogy. On the other hand, the extension of working time is made necessary by the fall in the ratio of active people to inactive people. Frankly, it’s easy to understand. Those who have not grasped the broad lines of the reform have made no effort to understand.
Difficulties in establishing a diagnosis
The lessons to be learned are elsewhere. I see two. The first is due to the lack of preparation for this reform. Indeed, while pension reforms in pay-as-you-go schemes are conceptually simple, they are technically complex. That the Prime Minister was able to announce a minimum pension of 1,200 euros for everyone even though any corner of the table calculation showed that the budgetary implications of such a measure were untenable proves to what extent the initial phase of the reform was botched.
It’s a habit in France. The President makes an announcement. The government executes it in haste. Trade unions are little involved. Our administrations, however plethoric, do not have the time to carry out impact studies, or else they are not read. This structural flaw in the design of our public policies is not due to a lack of resources but to a lightness that should be combated in order to restore the effectiveness of government action.
The second lesson takes us back to the publication of the COR’s annual report this week. We have difficulties in France, not only in agreeing on the policies to be pursued, but on the diagnosis. When an independent institution like the COR announces its forecasts, everyone discusses them, including at the top of the executive, questions them, interprets them as they see fit. As the President of the Republic had said: “We have not succeeded in sharing the constraint.” It is so true that, in an attempt to calm the street, the government has multiplied the concessions which prevent the reform from replacing our pension system in the green. This year, France must have issued 270 billion euros of bonds on the financial markets. This amount places us in a situation of indisputable dependence vis-à-vis these markets. Who cares ? Person. In France, the financial constraint does not exist in the minds.
* Nicolas Bouzou is an economist and essayist