France passes controversial pensions bill

City A.M. Reporter
France’s Constitutional Council approved President Nicolas Sarkozy’s pension bill yesterday, clearing the last hurdle to a controversial reform that will raise the retirement age by two years to stem a huge pension deficit.

Despite a late challenge by the opposition Socialist party, the council ruled that the proposed pension law does not breach constitutional rules. It is likely to be signed into law by Sarkozy in the next few days.

Fierce opposition by trade unions and the French public, who staged the most sustained of a wave of protests in Europe against austerity measures, turned the pension reform into the biggest battle of Sarkozy’s presidency.

Long-running port and refinery strikes that badly disrupted fuel supplies failed to stop parliament passing the pension bill last month, in a victory for the conservative president as he tries to reassure financial markets that France can tackle its public deficit.

Sarkozy’s popularity ratings are at rock-bottom 18 months ahead of a presidential election, but pushing through a reform of the pension system where other governments gave in to unions has bolstered his standing within his centre-right UMP party.

Turnout has flagged at recent street marches against the reform, which will gradually raise the minimum and fully pensionable retirement ages by two years to 62 and 67 respectively.

France’s main trade unions agreed late on Monday to call for a day of localised action on 23 November against the reform that could include small-scale work stoppages and workplace meetings, but their meeting made clear that momentum for large-scale nationwide protests over the pension law has waned.