When a million people protest in the streets of Paris and most major French cities, it becomes clear to everyone that something is very wrong. Deteriorating demographic data show that Europe is facing a huge challenge.
The four-day protests culminated on February 11 in Paris, where half a million people are said to have attended. The demonstrations were reminiscent of the 2018 yellow vest revolution, which was initially directed against the increase in fuel prices, but soon turned into a demand for an increase in the net minimum wage in France, which is currently around 1,679 euros (636,000 forints) per month.
The latest proposal that has drawn the ire of protesters concerns President Emmanuel Macron’s plan to raise the retirement age from 62 to 64. With this, the head of the country practically admitted that the French pension system is in a terrible situation. In France, pensioners can receive 50 percent of their income, up to 41,136 euros per year. The state system is maintained by social security contributions, but the number of contributors is constantly decreasing.
It can be argued that the French president’s proposal is a legitimate attempt to curb the rising costs of the pension system, which would otherwise become unsustainable. The fact that the pension system is economically unsustainable is an inevitable consequence of French demographic changes.
In 1910, when the first pension law came into effect, life expectancy was 51.3 years, while now it is 82.4 years. Also, the population has grown exponentially since 1910, and there are now about 65 million people living in the country, up from about 39 million in 1910.
The current situation means that the younger generation, which makes up a much smaller percentage of the population, has to support more and more elderly people. However, from an economic point of view, this is not viable in the future.
Television channels interviewed countless angry protesters, who riotously asked: “Why should I still work after the age of 62?”.
Many young people also joined the protests, despite the fact that they are currently bearing a disproportionately large burden of financing the French pension system.
Pension system in other countries
Of course, the French pension problem is not unique in Europe. Neighboring Belgium, for example, has tried to reform its pension system several times in the last 30 years.
Every new government promises to reform the pension system, but abandons these ambitious proposals when they realize the complexity of the system and the unpleasant electoral consequences of the reforms.
Currently, in the aforementioned Belgium, for example, the retirement age is 65, which will gradually increase to 67 for those who retire on or after February 1, 2030. The situation is similar in Italy, where the old-age pension age is already 67, but due to the increase in life expectancy, the government may revise the further increase of the age limit.
Unfortunately, it is an extremely complex problem, since many people rightfully object to working even at an older age, while others have been enjoying their retirement years for decades. On the other hand, the constantly deteriorating demographic data show that the many elderly people are simply unable to be supported by fewer and fewer young taxpayers.
https://www.youtube.com/watch?v=videoseries