FRANCE: Sarkozy wants pension reform ready within months

President Nicolas Sarkozy vowed to overhaul France's creaking social security system on Tuesday (September 18), but said he would consult unions to stave off the sort of mass protests that have sunk previous governments' reform attempts. Sarkozy said the "special regime" pensions of some workers should be brought into line with the less generous civil service scheme, with the changes thrashed out over the coming months. France's generous social security system was financially unsustainable and should be replaced by a "new social contract" founded on the work ethic, merit and equal opportunities, Sarkozy said in his first major speech on social policy. "I ask the government to reform the special regime pensions without delay. The different situations which justified the special regime before the Second, or even the First, World War have largely disappeared," Sarkozy said. Previous efforts to curb the spiralling cost of the special regimes, which allow some employees at state-controlled companies to retire as early as 50, triggered massive street protests and forced two governments in the 1990s into retreats. Sarkozy went out of his way to smooth feathers with union bosses ruffled by Prime Minister Francois Fillon, who had said plans to overhaul the special regimes had already been drawn up and only required the presidential nod to be implemented. Unions accused the government of preparing to drive through change without consultation and vowed resistance, though weekend meetings with Sarkozy appeared to have cooled tempers. Sarkozy said Labour Minister Xavier Bertrand would start consulting trade unions and business representatives from Wednesday (September 19) to discuss the planned changes. "As from tomorrow, Xavier Bertrand, who I thank and trust, who I have asked to drive this reform, will start discussions with all parties concerned -conferations, trade unions, parliamentary groups, heads of companies. At the end of these discussions, which I have told Xavier Bertrand should not last longer than two weeks, Xavier Bertrand will announce the common principles of harmonisation" Sarkozy added. He said the reform should be ready in several months. The special regimes allow workers at companies such as French railways and the state gas and electricty companies to retire earlier and with better pensions than the private sector. The special regimes were introduced at the end of World War Two and were designed to reward people engaged in dangerous or difficult jobs, or those vital to the reconstruction effort. Sarkozy won May presidential elections vowing wide-ranging reforms and a BVA poll on Tuesday showed most voters supported his economic policies, with 69 percent backing pension reform. Pension special regimes will cost France five billion euros ($6.9 billion) this year and are an obvious target for reform as France struggles to meet its European Union budget commitments.

ITN Source | September 19, 2007

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