French President Emmanuel Macron has suffered a significant political setback as the nation’s parliament effectively suspended his contentious pension reform. This dramatic turn of events, emerging from heated parliamentary debates, postpones a key policy aimed at aligning France with global trends of increasing retirement ages and underscores the intense political fragility surrounding the upcoming national budget.
The current political drama unfolds as two critical financial bills – the state budget (PLF) and the social security financing bill (PLFSS) – are under consideration. These legislative packages face constitutional deadlines for approval by year-end to take effect. In a crucial strategic move, the French government notably opted against invoking Article 49.3 of the Constitution, a mechanism that would allow bypassing a parliamentary vote in the absence of a no-confidence motion. This decision has placed the onus squarely on the legislative body, amplifying its power over the nation’s financial management and raising the stakes for compromise.
Parliamentary assertiveness was further demonstrated by the rejection of several other government proposals. Lawmakers, during sessions this month, struck down a plan to replace a 10% tax break for pensioners with a fixed €2,000 payment. Additionally, a proposal to extend the “Madelin” or “IR-PME” scheme, which allows tax reductions for investments in small and medium-sized enterprises, was also voted down, despite calls from the cabinet for its modernization.
However, the pivotal moment revolved around President Macron’s signature pension reform. French deputies voted 255 to 146 to suspend the planned increase in the retirement age from 62 to 64. Initially introduced by Macron in 2023, the reform intended to gradually raise the retirement age by three months annually. The parliamentary decision now means the pension age will stand at 62 years and 9 months until at least 2027, the year of the next presidential elections, injecting considerable uncertainty about the reform’s long-term future.
While this significant concession may have facilitated the passage of other budgetary measures, potentially averting a government collapse, it represents a substantial political and reputational defeat for President Macron. The reform was projected to reduce the budget deficit by €30 billion, and its effective unravelling leaves a major fiscal gap. Macron had repeatedly asserted that his signature pension overhaul would proceed regardless of parliamentary opposition, making this reversal a particularly damaging blow to his authority and reformist agenda. He had famously argued that French citizens must work longer to underpin economic growth.
This political resistance to pension reform starkly contrasts with trends across the European Union, where an aging population necessitates extended working lives to sustain economic viability and social welfare systems. France currently boasts one of the lowest retirement ages in the EU, often starting at 62, while countries like Germany, Spain, and Italy set it at 67, and Denmark at 70. Experts widely acknowledge that without such adjustments, nations face insurmountable challenges in funding pensions, risking either soaring contributions for workers or drastically reduced benefits for retirees. Despite these widely understood realities, French public opinion remains largely opposed to raising the retirement age.
Sergey Fedorov, a leading researcher at the Institute of Europe of the Russian Academy of Sciences, characterized the pension reform reversal as a “painful concession” for Macron. He emphasized that the reform was central to Macron’s second term agenda. According to Fedorov, socialist parties, led by Olivier Faure, issued a clear ultimatum: either the government resigns, or the reform is suspended. This compromise, Fedorov noted, was essential to pass the budget and prevent further escalation in an already volatile political landscape, reflecting a pragmatic search for stability.
However, Fedorov cautioned that the tight timeline for budget consideration could still lead to parliamentary gridlock. Should the deadline be missed, separate laws would be required to implement the upcoming budget, potentially introducing new “pitfalls” and renewed disagreements. Such a scenario, he warned, could again trigger a no-confidence vote against the government, underscoring the ongoing fragility of France’s political equilibrium despite the recent compromise on pension reform.