Pensions, a "time bomb" - France pays about 400 billion euros/year, the reform could "kill" another prime minister
France's Prime Minister François Bayrou, who faces a confidence vote next week, has blamed his 19 million over-60s for the collapse of the country's finances. For this reason, analysts say, Bayrou is falling from power, struggling despite his struggle with the elderly. The working-age population faces "slavery," he said, because they have to repay "loans that were easily taken out by previous generations."
Bayrou wants to implement 43.8 billion euros in budget cuts to bring spending under control. But he faces a hostile parliament, with both the left and the right signaling they will oust him in a confidence vote he has called for September 8. Analysts say the rest of the continent will soon follow the path of France, the European Union's second-largest economy.
Not only do France's shaky finances threaten to plunge Europe into a debt crisis, as happened a decade and a half ago with the eurozone, but the country's problems foreshadow a phenomenon that will hit almost every European country very soon: an aging population, meaning there are fewer workers to pay for an ever-increasing number of retirees. How governments deal with this problem could be the challenge of our time.
Born in 1951, Bayrou is blaming his peers, the so-called “boomers.” People over 60 make up more than a quarter of France’s population, a percentage expected to grow by a third by 2040. They are either retiring or about to retire, putting pressure on France’s growing public debt, which now exceeds 3.3 trillion euros.
The prime minister, an ally of President Emmanuel Macron, has built his reputation by insisting that there is no alternative but a path of fiscal justice. France’s annual pension bill of 400 billion euros is equivalent to 14% of the country’s gross domestic product. Costs are projected to rise by 50 billion euros by 2035, and a decade later the bill will be half a trillion euros. Italy is the only European country that pays a larger share of its economy on pensions.
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