New French president Francois Hollande has unveiled details of a plan to lower the retirement age to 60 for some workers - a key election pledge.
His predecessor, Nicolas Sarkozy, had faced strong opposition when he raised the retirement age by two years to 62.
The move in 2010 sparked weeks of strikes across the country, mainly by public service workers.
The decision comes as the EU warns that France will struggle to meet its fiscal targets without spending cuts.
Jean-Francois Cope, head of the conservative UMP party, said Francois Hollande was "burying his head in the sand".
Mr Sarkozy's reforms had been welcomed by financial markets and credit ratings agencies concerned about France's ability to cut its debt and deficit levels.
The European Commission warned last week that any changes in the French pension system had to be closely monitored.
Nannycrat Conflict Coming Right UpThe nannycrats in Brussels want to dictate and harmonize everything from tax rates (allegedly Ireland is too low), fiscal policy, immigration policy, work rules, interest rates, retirement age, tariffs, and crop subsidies.
The retirement age in Germany is rising to 67. In France it will be lowered to 60 even though people are living far longer.
Pact for Competitiveness
About a year ago Merkel Blasts Greece over Retirement Age, Vacation
German Chancellor Angela Merkel on Tuesday evening blasted Greece and demanded that Athens raise the retirement age and reduce vacation days. Germany will help, she said, but only if indebted countries help themselves.Tip of the Nannycrat Iceberg
"It is also important that people in countries like Greece, Spain and Portugal are not able to retire earlier than in Germany -- that everyone exerts themselves more or less equally. That is important."
She added: "We can't have a common currency where some get lots of vacation time and others very little. That won't work in the long term."
There are indeed significant differences between retirement ages in the two countries. Greece announced reforms to its pension system in early 2010 aimed at reducing early retirement and raising the average age of retirement to 63. Incentives to keep workers in the labor market beyond 65 have likewise been adopted. Germany voted in 2007 to raise the retirement age from 65 to 67 over the next several years.
In January of this year, Merkel proposed a "pact for competitiveness" that would force EU members to coordinate their national policies on issues like tax, wages and retirement ages. A watered-down version of the pact was agreed upon at a summit in March.
Retirement age is just the tip of the nannycrat conflict iceberg.
So when is Merkel going to tell Hollande that France should be raising the age to 67? When is Merkel going to tell France that crop subsidies have to end? When is Merkel going to tell Hollande labor reform is needed and there needs to be a provision for firing workers easier?
The equity markets are up today on fluff proposals that Merkel will bend in bailing out Spain, if Spain will relinquish sovereignty on other issues (see Merkel Bends, Equity Markets and Precious Metals Cheer, Bond Market Yawns; Lending to Peter so Peter Can Lend to Paul)
Assuming you believe that shell game will work, what about Ireland's lower tax rate? And pray tell, what about France and this giant step backward on badly needed pension reform?
For more on nannycrats and the nannyzone please see ...
- Another Meaningless Nannycrat Rumor: Europe Mulls "Secret Plan for New Europe"
- "Multi-Stage" Nannycrat Proposals; Devaluation - The Last Option? Note to Wolfgang M�nchau, Martin Wolf, Jeremy Siegel at the Financial Times: Focus on the Obtanium not the Unobtanium
Also see my original post on the "nannyzone" written June 2, 2011, nearly one year ago today: Trichet Calls for Creation of European "Nanny-State" and Fiscal "Nanny-Zone"
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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