The Borne ultimatum

It turns out you can fool all the people all of the time

The French need to retire later, pay more into their pension system or take less out of it. Their government knows it. Their parliament knows it. Even, according to a robust pre-pandemic survey of public opinion, two-thirds of the French know it.

Yet, once again, the country is rocked by protests, strikes and blockades against a law to bring the minimum pension into line with the EU average. Under pressure from the street, a healthy majority in the national assembly for phasing in a two-year increase in the pension age to 64 after 43 years of contributions crumbled.

Facing parliamentary defeat, prime minister Élisabeth Borne – with the blessing of president Emmanuel Macron – used Article 49.3 of the constitution to pass the law without a vote. This, in turn, has hardened opposition to the pension reform and could even bring down Borne’s 10-month-old government.      

No doubt, Borne and fellow ex-socialist Olivier Dussopt, the minister responsible for the reform, could have managed the assembly better. But it was never going to be easy and was made harder by pent-up resentment among voters at having to re-elect an unpopular president last year because the alternative – Marine Le Pen – was worse.

Creeping up

The one thing they can’t say is that Macron lied to them. Since 2017, he has made no secret of his plans for the pension system. Absorbing 14% of national output, French public spending on pensions is the joint third-highest in the EU (you’ll be shocked to learn that Greece and Italy take gold and silver) due to the generosity of benefits, the high proportion of pensioners, and the early minimum retirement age. And it’s not just a question of cost; the system has 42 more-generous sectoral schemes that inevitably discourage labour mobility.

As a result, pension reforms come along with monotonous regularity in France. Borne is the latest in a long line of prime ministers to take tweezers to this nettle. In 1993, Édouard Balladur hiked the minimum contribution period by 2.5 years to 40 years but was fortunate enough to do this during a currency crisis and clever enough to exempt public-sector workers. When Alain Juppé tried the same trick for the state payroll in 1995, a general strike soon reminded him who the daddy was. From then on, a string of premiers – Jean-Pierre Raffarin in 2003, François Fillon in 2007-2010, and Jean-Marc Ayrault in 2013 – went for creeping adjustments to buy a few more years of sustainability for the pension system.

This is, of course, a moving target. It’s now 2023 and not only has life expectancy risen to 82 but the pressures on public spending generally have increased due to the demands of healthcare, social care, the energy transition and – thanks to Vladimir Putin – the military. Before he took office, Macron’s dream was to put a stop to these confidence-sapping partial reforms and go for a big bang that lifted the retirement age to 65 and unified the 42 occupational schemes into one simple and equitable regime.

Unfortunately, politics happened. Despite having a pro-reform majority in the assembly, Macron and Borne concluded that the 42-into-one plan was too ambitious. Instead, the priority should be cost savings rather than structural reform and that means filling the gap between pension contributions and spending. Without changes, government projections foresaw this balance turning into an annual deficit of €13.5 billion by 2030 – a cumulative deficit of at least €60 billion between now and the end of the decade.

Although they were in opposition, the conservative Les Républicains (LR), who have long campaigned for retirement at 65, promised to support the changes. To ensure the bill’s passage through the assembly and the senate, concessions worth €5 billion were made to left and right. Yet, as the final assembly vote loomed last week, in an act of breathtaking political cowardice, as many as 26 out of the 61-member LR faction threatened to defect.

“Dangerous precedent”

Once she knew the vote was lost, Borne deployed 49.3 and provoked theatrical outrage among the opposition and on the street. In a motion of censure to be debated on Monday, opposition deputies condemn this “dangerous precedent that would allow governments to pass vast social reforms through devious, forced procedures that are dangerous for our democracy".

Someone should ask these deputies and protestors how 49.3 works, how many times it has been used, by whom and to do what. In fact, it is much the same as a confidence vote attached to a finance bill – a constant feature of Italian budget-making. The pension reform can still be overturned next week if the assembly votes no-confidence in the Borne cabinet.

Since it was written into the constitution in 1958, 49.3 has been used 100 times – mostly by minority governments (like Borne’s) to pass finance bills. The record holder is Michel Rocard, the prime minister under president François Mitterrand from 1988-1991, with 28 when the use of 49.3 was unlimited (now it can only be triggered once per mandate for non-finance bills).

As for Borne’s unprecedented use of the instrument to pass a “vast social reform”, 49.3 was activated by conservative Michel Debré (1958-1962) to approve the establishment of an independent nuclear arsenal, socialist Pierre Mauroy (1981-1984) to allow nationalisations, conservative Balladur (1993-1995) to reverse those nationalisations, socialist Rocard to introduce a “vast” and brand new social-welfare payroll tax, and conservative Dominique de Villepin (2005-2007) to ram through a controversial flexible job contract. On 59 occasions, the opposition responded with a motion of censure and, until now at least, has never won.

So much for the faux outrage. A more serious objection is political. Did it make more sense to push this reform to a vote, split LR, accelerate the defection of centre-right voters to the three majority parties, and fight a legislative election that showcases the irresponsibility of the new parties of the left (NUPES) and right (RN)? Absolutely. In fact, given how flaky LR turned out to be, Macron should have stuck with Plan A and brought a big-bang reform to parliament for an up/down vote. Instead, the president has gone to war for another creeper that will have to be revisited in 2030.

I’m taking next weekend off so I’ll see you again in April.