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French PM Edouard Philippe unveils controversial new pensions system

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French PM Edouard Philippe unveils controversial new pensions system
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Thomas Samson/Pool via REUTERS
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France's prime minister has vowed to push ahead with controversial reforms to the country's pension system despite crippling strikes.

Edouard Philippe said the plans seek to simplify the current regime, which has 42 different pension schemes for workers depending on their profession.

Industrial action in the run-up to Philippe's announcement on Wednesday has paralysed public transport in Paris and disrupted national rail services and grounded many planes.

"We will put an end to special regimes," Philippe said. "We will do it progressively, without brutality. The time of [a] universal system has come, that of the special regimes is ending."

Retirement age pushed from 62 to 64

To those worried that the new points-based system might lead to successive governments devaluing the value of the point and therefore the amount of pensions, Philippe said the law will “guarantee” its value, which will be indexed on salaries and set by unions under the control of parliament.

The most controversial announcement was that of the “pivotal age” of retirement, which has been pushed from 62 to 64 years-old, despite 62 remaining the age one can legally decide to retire. It will be applied from 2027 for people born after 1975.

The reform includes general provisions, such as a “minimal pension” of 1,000 euros (which has been French law since 2003), as well as guarantees for specific groups. Those in a "tiring job" and those who entered the labour market before the age of 20 will be allowed to retire two years earlier, Philippe said. Points will be allocated for maternity leave from the first child, instead of the third currently, making women the “big winners” of this reform, Philippe said. Pensions for teachers will not change, the PM said, and their salaries will revalued in the next years. Freelance workers will see their pensions contributions aligned with the new system "in the next 15 years", he said.

Unions are unconvinced

The French PM's announcements did not convince unions: the CGT rail union has called to "reinforce the strike" while the FO workers' union said there is a "need to strengthen the mobilisation" against the reform.

The leader of the CFDT union, which until then had refrained from calling to strike, has said that "a red line has been crossed" regarding the retirement "pivotal age", pushed from 62 to 64. UNSA, the biggest union of the Paris metro network RATP, has had a similar reaction, saying that a "limit" has been "crossed" on retirement age.

"The government has fooled people", Philippe Martinez, the CGT leader, has said. "Discontent and determination remain the same", the teachers' union FSU has said.

The only union who said the reform was "balanced" is the Medef, traditionally the management's union.

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