French Pensions Face Squeeze From Defense Budget Hikes

French premier François Bayrou survived a confidence vote in February after promising fresh talks over pension age rise. But no change has been forthcoming — and calls for increased defense spending are pressuring pensions even further.

François Bayrou at the French National Assembly in Paris on September 14, 2010. (Patrick Kovarik / AFP via Getty Images)

After a rocky start, François Bayrou held onto his position as prime minister in February by making France a promise. Trade unions and business lobbies, he said, would be able to hold a series of negotiations to hash out possible amendments to President Emmanuel Macron’s controversial 2023 reform to France’s retirement system. Adopted without a parliamentary vote, Macron’s pension law extracted savings solely on the backs of late-career workers, increasing the retirement age for public pensions from sixty-two to sixty-four while safeguarding employers and wealthy retirees from new charges.

There would be no “totems or taboos” in any reworking of the law, the new prime minister pledged. This meant that — at least in theory — a retreat on the retirement age was not off the table. Whatever emerged from the negotiations was to be transmitted to parliament for an up-or-down vote by this summer. Thanks to these pledges, Bayrou was able to win the tacit support of the center-left Parti Socialiste, which abstained from a no-confidence vote in early February that might have caused the collapse of his government.

Weeks later, Bayrou’s format now appears to be cracking apart, as the prime minister himself explicitly rules out any repeal of the most controversial element of the 2023 law.

On March 16, Bayrou made it official that his government would broker no return in the pension age to sixty-two. Unions, alongside the left-wing and far-right parliamentary oppositions, accused the premier of backsliding. But Bayrou doubled down on his position on March 18, arguing before parliament that it was “not possible” to envisage a lowered retirement age given France’s budgetary difficulties and the broader geopolitical crisis.

The 2023 pension reform kicked off weeks of protest marches and strikes and was a key ingredient in the legitimacy crisis that ultimately led to Macron’s electoral defeat in last summer’s snap parliamentary elections. Usually divided, France’s labor unions were united in opposition to the bill, in tune with the public’s broad-based rejection of the increase in the retirement age. Repealing the 2023 reform has remained a rallying cry for opposition forces, most notably the left-wing Nouveau Front Populaire alliance that emerged as the largest bloc in last summer’s parliamentary elections.

Masquerade

Union participation in Bayrou’s pension system “conclave” was already showing strain before the premier’s position was made clear last week. In late February, just as the talks got underway, the midsize union Force Ouvrière pulled out of the talks, denouncing the negotiations as a “masquerade.”

But Bayrou’s latest statements marked a crossing of the Rubicon, one that could potentially strain his government’s hold on parliament should he face a new no-confidence motion this spring.

On March 19, the Confédération Générale du Travail (CGT) announced that it, too, was withdrawing from the talks. France’s second largest trade union by membership, the CGT is known for its firm opposition to attacks on welfare rights and labor protections — and often unbending negotiating strategy. After an internal leadership vote on March 19 in favor of abandoning talks, CGT leader Sophie Binet took aim at the “prime minster and corporate bosses” for “definitively burying” the possibility of any serious negotiations.

“Everything was done so that we could not call the [retirement age increase] into question,” Denis Gravouil, the CGT secretary in charge of retirement and a participant in the recent talks, told Jacobin. “It was made very clear that we could discuss everything except the most important matter at hand,” he continued.

The Confédération Française Democratique du Travail (CFDT) and other more centrist unions have not yet walked away from the roundtables. Demanding a reset in the negotiations, CFDT general secretary Marylise Léon nonetheless deemed last Wednesday that the prime minister had “broke the deal” laid out earlier in the year.

“Dragged Along in the Dirt”

From the beginning, there were reasons to doubt that talks would yield any serious concessions on the 2023 retirement law. Government officials made it very clear that the key premise of any eventual tweaks had to be that they would not weaken the long-term financial solvability of the retirement system, with Bayrou writing to the participants in February that the goal had to be a balancing of inlays and outlays by 2030.

Even with the 2023 retirement age hike, the pension system’s annual deficit is expected to reach €6.6 billion in 2025, according to France’s national Court of Audit, and climb to €15 billion by 2035. (Independent researchers have accused the court of vastly exaggerating future deficits.) In his inaugural speech to parliament in January, Bayrou warned of an even more outlandish deficit level at €55 billion.

The government’s line was also that any reworking would not include new taxation or payroll charges on employers. For their part, business lobbies — like the powerful Mouvement des Entreprises de France (MEDEF) — were more eager to discuss ways to increase the preponderance of private retirement plans, when they were not calling for another outright increase in the public pension age.

With those qualifiers and obstacles, it was not hard to read between the lines to see that no serious reversal was in the offing.

The fact remains, however, that the public is still largely opposed to the 2023 reform, despite MEDEF chief Patrick Martin’s claims in February that the French had “resigned” themselves to it. According to a September 2024 opinion study, a mere 11 percent of the public want to see the law stand as is, with a thumping majority calling for either significant adjustments or the law’s outright repeal.

Bayrou’s allies are betting that their scuttling of the retirement “conclave” will pass with only a few minor scars — and that it won’t lead to either the far-right Rassemblement National or the Parti Socialiste supporting an eventual motion of no-confidence. “A no-confidence vote is still on the table,” Parti Socialiste leader Olivier Faure told BFMTV on March 18, before hedging the party’s position to say that the nonaggression pact with Bayrou’s centrist bloc would continue “so long as the [retirement talks] continued.”

But Bayrou’s declarations last week have justified the skepticism expressed by the Parti Socialiste’s left-wing partners at its decision to prop up Bayrou’s government in February. Speaking at a rally in Brittany on March 19, France Insoumise leader Jean-Luc Mélenchon poked fun at his Parti Socialiste rivals for being “dragged along in the dirt” by Bayrou’s government: “Was there anyone in this country who sincerely believed that this right-wing government would lower the retirement age back to sixty-two?”

Arthur Delaporte, an MP for the Parti Socialiste, told Jacobin that his party’s vote of a no-confidence motion is “probable” without any steps in the Left’s direction, such as a freeze in the phase-in increase of the retirement age before it reaches sixty-four.

The far right’s potential stance on any no-confidence vote this spring could ultimately have very little to do with the retirement question. On March 31, French judges are expected to release a verdict in an embezzlement trial against Rassemblement National leader Marine Le Pen, a decision which may land her with a five-year ban from seeking elected office.

Sixty-Seven?

The government is also counting on the retirement question being drowned out by the emerging national consensus for increased military spending, as forces to the left and right of Bayrou largely accede to the government’s calls for new military credits.

In fact, the prospect of raising the defense budget is already feeding back into calls for another increase in the retirement age.

Gilbert Cette, the president of France’s public commission on pension financing, recently lambasted the retirement talks as “ridiculous” and out of phase with the geopolitical crisis. In a controversial blog post in early March, Cette argued that “the question really ought to be . . . how do we rapidly increase the retirement age beyond the 64 years decided in the 2023 law?”

Bayrou’s competitors on the Right and even within Macron’s coalition are positioning themselves to lead another push to increase the retirement age. Macron’s first prime minister, Édouard Philippe — a known 2027 presidential contender — has called for a minimum pension age as high as sixty-seven years. “The truth is that, given the threats, we’d do well to bring social and political forces together, not to ask them whether we should go back on a reform that’s already been passed, but to ask ourselves how we can adapt to the considerable, almost existential effort that lays ahead,” Philippe told right-wing organ Le Figaro on March 14.

“Already in 2023 we were hearing similar arguments: that France hadn’t yet raised the retirement age like other countries had, or that we have to work more because of the constraints of international competition,” says Gravouil, the CGT union representative. “People will always find a good excuse to say that the French don’t work hard enough or long enough.”

But it remains to be seen whether unions will be able to galvanize popular opposition like they did two years ago, with social movements largely lifeless and workers feeling the crunch of a stagnating economy and a lingering cost-of-living crisis. The CGT held a small series of demonstrations on March 20 and points to other actions scheduled for this spring, hoping to keep the issue in the public eye.

In France’s hung parliament, any significant change of the post-2023 status quo is unlikely. Marine Le Pen’s Rassemblement National symbolically motioned to repeal the reform last fall but any serious vote to that effect would directly contradict the far right’s concerted attempt to improve ties with corporate interests. With only a third of the seats in the National Assembly, the parties of the fraying Nouveau Front Populaire alliance are also too weak to impose any overhaul.