Suspension of French pension reform worries future generations

The French National Assembly has decided to suspend a pension reform measure that gradually raised the retirement age from 62 to 64, just two years and two months after its implementation. Seeking opposition support to pass next year’s budget, the French government submitted the suspension plan to the lower house. The reform’s resumption has been postponed until after the next presidential election in 2028, leaving its future uncertain. Two years ago, the government had pushed the reform through using a special constitutional provision that allowed it to bypass a parliamentary vote, but the measure ultimately failed.

In March 2023, President Emmanuel Macron took a high-stakes approach, saying he would prioritize the national interest over public opinion, and the reform went into effect in September of that year. However, public backlash over expected income reductions and political opposition that capitalized on the discontent created a crisis. Over the past two years, France experienced political turmoil with five changes in prime minister, and the government eventually conceded. Officials estimate that suspending the pension reform will cost an additional 2.2 billion euros (about 3.7 trillion won) over the next two years, and if the reform is not revived, the financial burden could rise significantly.

France’s failed pension reform, once cited as a model of success, offers a cautionary lesson: deeply entrenched welfare systems are difficult to reform, and even urgent measures cannot succeed without social persuasion and efforts to build consensus. South Korea, where the pace of increase in pension recipients is 2.4 times faster than in France, should take note. While reform pressure is higher in South Korea, progress has been slow. In March of this year, lawmakers agreed to a baseline pension reform for the first time in 18 years, but it was a partial measure focused on “more contributions for more benefits,” and follow-up structural reform discussions have effectively stalled. Recent stock market gains have even fostered false expectations that boosting investment returns alone can prevent pension depletion without structural reform.

On the 13th, President Lee Jae-myung emphasized that “potential growth must rebound through structural reforms in six key areas,” highlighting pension reform as a major task. He stressed that reform must be driven strongly from the early stages of the government term, while political will and momentum are alive, to ensure success. Hesitating due to public opinion or electoral concerns risks missing the golden window. It is essential to recognize that the longer pension reform is delayed, the greater social conflicts will become and the heavier the burden for future generations.