Here’s a twist. In a trend completely at odds with the rest of the world, France has made a move to lower its retirement age for some workers, from 62 years to 60. And critics are saying it could be a costly mistake.
All around the globe, governments have been pushing retirement ages higher in recent years, as people are living longer and therefore spending more years relying on state-sponsored pension cheques.
Canada, for instance, recently announced its intention to postpone retirement age to 67 from 65. Across the pond, the U.K. has said the state pension age will increase to 66 by October 2020, and to 67 by April 2028. Other European countries are also on board: Germany currently has a retirement age of 67, Poland plans to follow suit by upping its retirement age to 67, Sweden plans to raise its age to 69 and Italy is increasing its retirement age to 66 for men and 62 for women.
Raising France’s general retirement age by two years to 62 was a key reform of Nicolas Sarkozy, who was defeated in France’s presidential election.
The 2010 measure was aimed at reducing heavy government debts as Europe sunk into a continent-wide debt crisis—and many economists said it didn’t push the retirement age high enough.
Hollande, who unseated Sarkozy last month after riding a wave of voter anger at austerity measures, pledged during his campaign to reconsider the retirement reform.
On Wednesday, Hollande’s government presented a draft decree at a Cabinet meeting that reverses the retirement age to 60 for some workers, such as those who enter the workforce at 18 or 19 years old, or mothers who leave the workforce to have three or more children.
The hard-left CGT union hailed the move as a “striking decision that breaks with policies everywhere in Europe.”
The government said the decree, affecting about one in six retiring workers, will be finalized later this month and take effect in November.
The government says the costs—estimated at 1.1 billion next year—will be financed by a small rise in payroll charges paid by employers and employees. The government did not release a global cost for the measure.
The Socialist Cabinet is making the change by decree, amending an existing decree on workers who serve especially long careers, instead of via a law, which would need the approval of the parliament, currently dominated by conservatives. France is holding parliamentary elections starting Sunday, and Hollande needs to secure a leftist majority to accomplish much of what he pledged on the campaign trail.
France’s leading business lobby, MEDEF, criticized the measure as “worrying for the financial future of the pension systems and for the competitiveness of businesses.”