Source: The Wall Street Journal
PARIS -- The French government approved a measure Wednesday that will lower the retirement age to 60 from 62 for a narrow group of workers, partly reversing unpopular pension reforms made by former president Nicolas Sarkozy as he sought to improve France's public finances.
The reform, which is less sweeping than promised by new socialist president Francois Hollande during his election campaign, comes just days ahead of legislative elections in France and likely is to further fuel questions about Hollande's ability to make a serious dent in France's deficit against a backdrop of the deepening eurozone crisis.
The government's decision will authorize people who contributed to the pension system for more than 41 years to retire at 60, Social Affairs Minister Marisol Touraine told reporters after the weekly cabinet meeting. The government also will take into account maternity leave and unemployment periods in the contribution period, she said.
Touraine said the reforms will cost €1.1 billion ($1.37 billion) in 2013 and €3 billion in 2017. The extra expenditure will be covered by increased contributions by employees and employers, she said.
Touraine added that 110,000 people will be affected by the reform.
The measures will allow people who started working early in life and who have paid the required amount of pension contributions over the course of their working life to retire at age 60, instead of the normal minimum retirement age of 62.
During the election campaign, Hollande promised to partly roll back the reforms imposed by Sarkozy two years ago and bring down the retirement age for certain workers. He said the additional cost for the government will be offset by savings elsewhere.
Hollande came to power promising to create jobs for young people and recruit 60,000 more civil servants in education, while sticking to the target of bringing the budget deficit down to three percent of gross domestic product in 2013 from 5.2 percent in 2011. But he has yet to outline detailed economic plans beyond a broad plan to shift the burden of taxation onto the rich and rely on economic growth to improve France's finances.