When the president, in the midst of strikes and reactions from the unions, had managed to increase the increase in the minimum retirement age from 62 to 64, analysts spoke of a necessary move that would help in the long run in the viability of the insurance and therefore.
No one could predict then that very quickly, in just two years, this emblematic reform would be essentially a thing of the past, though everything would depend on the outcome of the 2027 presidential election.
The last year’s political crisis, however, has led to the need to reach a compromise, as the outcome of the 2024 elections created a fragmented national assembly with almost three equivalent factions, but none of which have gathered the necessary majority.
The “sacrifice” on the altar of government
In the face of the danger and the second government of Lekorni will be a thing of the past just a week after the first: to give his approval to the prime minister to “freeze” the insurance reform, at least until the presidential election.
There had also been a statement by the current Minister of Education and former Prime Minister Elizabeth Born, under the prime minister of which the reform was passed, in favor of its suspension.
whose 69 MPs “define” the balance of forces in the National Assembly, not to support the motion of censure against the government. However, the party will continue to threaten with a motion of censure until “words turn into acts,” as the Socialist leader in Parliament, Boris Valo, said.
The necessary support of socialists
With most of the other opposition parties trying to overthrow the Lekorni government, so that the government can breathe some space by putting a temporary end to one of the most troubled political periods in modern French history.
The resignation of the first Lecorne government, after all, pushed France to a coil of political chaos that shocked the financial markets, creating serious concern as to whether the eurozone’s second largest economy was so ruthless that it could not make the cuts that it could not make the cuts to 5.4% of gross domestic product this year.
“The debate on the issue of pensions is not just an economic equation. It is an essential part of our social contract. And this contract also needs a revision, “Lekorni said in his speech in the plenary of the National Assembly.
The prime minister also insisted that such a suspension should be accompanied by sufficient savings to limit public spending.
What will the reform freezing
Lekorni also estimated that the freezing of pension reform would cost French public financially 400 million euros in 2026. Earlier, his government proposed a budget aimed at reducing the deficit below 5% of GDP in the following year.
Financial markets have already reacted to Lecorn’s announcement with relief. The borrowing cost of the 10 -year government bond decreased by 0.07 percentage points to 3.40%, the lowest level for more than a month. Similarly, the difference between it and the comparable performance of German bonds – an indication of the relevant risk profiles of the two countries – decreased to 0.80 percentage points, the lowest level for three weeks. The CAC40 reference index of the stock market fell 0.2%, but remained one of the best -run markets in Europe on Tuesday.
On the other hand, however, the suspension of the reform could cause ruptures in the already fragile minority coalition of the government, especially with the conservatives who have been in favor of it.
Bruno Retagio, head of the centrifugal Les Républicains, said that “the suspension of pensions reform and the prime minister’s silence on immigration prove that this government is being held hostage to the Socialists.” It remains to be seen whether this fragile balance will be able to be maintained until the elections of 2027.
