Close But No Cigar!
Charlton of the Boston Globe reports, French
prime minister urges big cost-cutting:
Prime Minister Francois Fillon on Friday rebuffed unions angry over
plans to raise the retirement age by two years, urging the French to
show "courage" and make an unprecedented effort to cut the enormous
The government said Friday it's considering freezing
public sector salaries for the next three years -- a prospect that
prompted unions to slam the door on salary talks with the labor
minister in protest.
Unions are energized after nationwide
strikes and protests Thursday that brought nearly a million people to
the streets to protest President Nicolas Sarkozy's bid to reform a
money-losing pension system. The reform includes raising the retirement
age from 60 to 62 -- which would still be among the lowest in Europe.
Fillon defended the pension reform at a news conference hastily
arranged after Thursday's protests.
Fillon said he "understands
the worries" of workers, but added, "We must break the spiral of
indebtedness. ... We need a bit of courage."
He carefully avoided
using the word "austerity," saying it was too soon to impose cutbacks
like the more sweeping ones introduced in Germany or some other
He spoke as Sarkozy and Finance Minister
Christine Lagarde were heading to Canada for meetings of the G-8, or
Group of Eight, and later the G-20, or Group of 20 leading world
A key subject at the discussions will be how to revive
the world economy after global financial meltdown, and how much and
how fast to cut government spending.
said on France-Inter radio Friday that France's pension reform is the
government's way of "trying to send a message of security to the
markets" about France's commitment to cutting its debt.
French budget deficit was at 7.5 percent of gross domestic product last
year. The conservative government has vowed to bring it under 3
percent -- the threshold set by the European Union -- by 2013. The
Greek crisis has given added urgency to France's plans to cut back.
insisted that the pension reform and other cost-cutting would not
threaten to slow the economic recovery, and reiterated forecasts that
the French economy will grow 1.4 percent this year after contracting
2.5 percent last year.
Fillon said the retirement reform will
save nearly euro19 billion ($29.3 billion) in 2018 and should bring the
pension system back into the black that year.
Unions say money for the pension system
should come from higher taxes or charges on those who are still
working, and see cost-cutting in the pension system as an attack on a
hard-fought way of life. The government says that given rising life
expectancy, workers must retire later.
Unions have long feared
that public sector salaries could be targeted in cost-cutting measures,
and the government confirmed Friday that a 3-year salary freeze is on
the table, according to Jean-Marc Canon, head of the CGT-Fonction
He was part of salary talks with Labor Minister
Eric Woerth on Friday that ended in a union walkout.
the heat, French president Nicolas Sarkozy said cigars
are out and perks will be cut ahead of austerity measures:
pensions, a lavish Bastille Day garden party and ministers’ Cuban
cigars are to be sacrificed in the name of economic recovery as the
French government seeks to show that ministers are sharing the pain of
their austerity drive.
With his government attempting to raise
the retirement age and bracing people for cuts of €45 billion in public
spending, president Nicolas Sarkozy has said ministers must lead by
example and reduce their own budgets. France has not yet set out a
detailed austerity package, but the national auditing office recently
called for urgent moves to trim the deficit.
It is widely
believed that Mr Sarkozy will cancel the traditional July 14th garden
party at the Elysée Palace, an annual event that was attended by 7,000
people last year and cost more than €700,000.
Ministers are also
to be ordered to cut the number of people employed in their cabinets
(private offices), while a reduction in the number of ministers is
expected in the next reshuffle.
government’s belt-tightening follows a series of damaging revelations
about ministers’ extravagant lifestyles and waste of public money.
was reported this week that prime minister François Fillon had asked
junior minister Christian Blanc to reimburse the state €12,000 of
taxpayers’ money which was used to buy expensive cigars.
Enchaîné, which has specialised in publishing details of ministers’
expenses, had published receipts from a Paris cigar shop for high-end
Cuban brands that were billed to the government.
Mr Blanc, a
former head of Air France who is now junior minister for the greater
Paris area, blamed a staff member for the purchases and has already
reimbursed €3,500 for those he had smoked.
Further embarrassment followed when it was revealed that
Christine Boutin, a minister sacked last year by Mr Sarkozy, was still
earning €18,000 a month from the state thanks to a parliamentary
pension and a special “mission” from the president to write a report on
Ms Boutin said she would keep the pension and
give up the € 9,000 a month for the report.
controversy then led to five ministers who were drawing a parliamentary
pension being ordered to forego them as long as they served in the
Until recently, the generous perks and privileges given
to France’s ruling class had attracted relatively little scrutiny, but
the economic crisis, public disquiet and regular leaks have shone a
harsh light on the system.
ago, Mr Fillon ordered ministers to take only commercial flights after
his state secretary for overseas development, Alain Joyandet, spent
€116,500 chartering a private jet to attend a conference in Martinique.
perk in peril is the free Paris flat that goes automatically with
cabinet rank, whether needed or not.
That one hit the headlines
when industry minister Christian Estrosi was revealed to be occupying
rooms at the Economics Ministry in eastern Paris while lending a
relative his official apartment overlooking the Eiffel Tower on the
other side of the city.
Fadela Amara, state secretary for urban
affairs, admitted this month that family members sometimes used her
official apartment in the same upmarket district while she stayed in her
own more humble flat in a working-class part of the city.
revelations about ministers’ royal-style perks have been especially
damaging because they coincide with the government’s attempts to prepare
the public for severe spending cuts.
Didier Migaud, the head of
the national auditing office, said savings of €45 billion would be
needed and that the government would be required to take a “very sharp
turn” on public finances.
France, alone among the biggest European
economies, has yet to set out details of a savings plan, but a
spokesman for Mr Sarkozy said measures would be outlined in the coming
What are those French ministers The reform cuts benefits, curbs "We inherited a "It is our responsibility to save the country from The ruling socialists face a battle over the "The draft pension bill ... is By "We The socialist party has 157 of 300 seats Analysts see the And
smoking? Meanwhile, Reuters reports that the Greek
government agreed on Friday the most radical
shake-up of its pension system in decades to avert bankruptcy and
satisfy foreign lenders despite fierce opposition at home:
widespread early retirement, increases the number of contribution
years from 35-37 to 40 and raises women's retirement age from 60 to
match men on 65.
pension system which had collapsed and we are fixing it," Labour
Minister Andreas Loverdos told a news conference after the cabinet
approved the cuts.
reforms, agreed as part of a 110 billion euro ($147.6 billion) emergency
loan package from the EU and IMF. Most voters oppose the reforms and a
strike on June 29 will gauge the strength of public discontent as
lawmakers start debating the bill.
slaughtering fundamental pension rights," public sector union ADEDY said
in a statement.
contrast, the EU Commision in Brussels praised the overhaul as
respecting the loan deal.
welcome it as a major step towards improving the sustainability of
public finances," spokesman Amadeu Altafaj Tardio said.
in parliament and the reform is likely to pass despite some criticism
from its ranks.
Greek pension reform as a test case. It goes beyond tax increases and
public wage cuts to tackle a sector which epitomises many of the woes
that have caused the country's downfall, including tax evasion, red
tape, selective privileges and delayed reforms.
if you think things are bad in Greece and France, here comes Romania
are taking place over pension, wage cuts:
The reform cuts benefits, curbs
"We inherited a
"It is our responsibility to save the country from
The ruling socialists face a battle over the
"The draft pension bill ... is
The socialist party has 157 of 300 seats
Analysts see the
Hundreds of people were protesting Friday in the
Romanian capital over cuts to public wages and pensions, the spokesman
for the country's president said.
Unions said there
were 600 people outside the presidential palace, but the spokesman said
there were about 400.
Anti-riot police had to stop about 25 or
30 people who went past the barricades, spokesman Valaureu Turan told
Prime Minister Emil Boc recently
announced a 25 percent cut in public sector wages and a 15 percent cut
in pensions. The Constitutional Court of Romania ruled Friday that part
of the laws are not constitutional, so the government will have to
decide on the next step, Turan said.
As you can see, the
global pension war is spreading fast. Change is
brutal and workers are angry. Who can blame them? They're seeing
banksters get away with billions in bonuses and bailouts, and now that
the pension Ponzi is running out of money, they're stuck having to work
longer to make up for the shortfall.
As for the capitalist ruling class pushing these reforms, they're all
saying 'close but no cigar'. If Marx were alive today, he'd be pouring
over pension legislation and pension documents, trying to understand how
the financial capitalists have stolen trillions from common workers,
engineering the greatest transfer of wealth in the history of mankind,
and saddling them with massive debts in the form of pension IOUs.