The pension/social security reform is a “hot potato” for all rulers in every corner of the earth. But if it is not “negotiated” in his second term by a president with executive powers who does not have the possibility of a third term – thus indifferent to the political cost -, when will the Gordian Tie be broken? In the French version of the puzzle, the pension reform was a promise of Emmanuel Macron from his first presidential campaign in 2017. In 2020, he opened the file, but quickly closed it again due to the pandemic and the electoral claim of an approaching second term.
The government is determined
“The issue is to reach a consensus” assured last Tuesday the Minister of Labor Olivier Disault referring to the pension reform. Intensive consultations with the social partners and the special rapporteur on reforms, veteran centrist politician François Beyrou, had preceded the weekend.
Negotiations that ended in an impasse due to the refusal to cooperate by France’s largest labor union CFDT. But the executive is said to be determined to “pass” this reform, even if it resorts to the possibility given to the National Assembly by the French Constitution to “force the passage” of a piece of legislation.
The friction point
The government is deliberately keeping the exact content of the reform vague, but moving the minimum age for full retirement from 62 to 64 or even 65 appears to have been confirmed for President Macron. This is also the point of friction in the negotiations. In other words, the regulation to which unions and the opposition are reacting by slowing down an already slow process, which as the Minister of Labor himself expressed the hope to complete and “the first elements of the reform to be implemented in 2023, because the balancing of the system is urgent”.
What possibilities do Macron and Elizabeth Bourne’s government have to speed up their pensions policy? To bypass the time-consuming process of drawing up, debating and passing a bill, they have the constitutional possibility to include the pension reform as a separate decree in the Draft Law on the Financing of Social Security, the discussion of which in the National Assembly will begin on October 20.
“Forced Voting”
This is a procedure that is characterized as a “forced vote” of the bill and is perceived as extortionate even by MPs of the majority and especially of the MoDem party cooperating with the government of the special rapporteur for the reform, François Beyrou.
“If we resort to this method, we must be sure that we will rally the opposition against the reform and then divide French society,” noted Beyrou, who did not rule out the possibility of even submitting a no-confidence motion against the government to the National Assembly.
The problem is that the motion of no confidence could also be passed by the MoDems – and the Bourne government would fall. The head of the centrist party’s parliamentary group, Jean-Paul Mattei, told the press directly that “no reform, small or large, can be accepted by decree”. Matei made it clear that the 49 MoDem MPs “will vote against this decree”.
On Tuesday morning, Olivier Disault stated, however, that “if we find ourselves in a deadlock, we also have constitutional tools to move forward.” The Minister of Labor referred to the famous article 49 paragraph 3 of the French Constitution on “forced voting”, which the former Prime Minister Edouard Philippe had also resorted to in 2020 to promote the pension reform, but he was overtaken by the tumult of the coronavirus.
Berlin also nationalized a second energy company
Germany confirmed last Wednesday the nationalization of energy giant Uniper which has been faltering after cuts in Russian gas imports. The government has decided to add another 8 billion euros to the overall rescue package for Germany’s biggest importer of Russian natural gas. It is the second nationalization of an energy company that Berlin has decided within a week, as in mid-September it took control of an oil refinery from Russia’s Rosneft, which supplies the German capital with 90% of the fuel it consumes in total.
Uniper, whose shares have lost 39% of their value to 2.55 euros on the Frankfurt Stock Exchange, has run out of cash because of the expensive supplies of natural gas from other sources that it began to make after the phase-out of the faucet on behalf of Moscow. In July, the German government approved a 15 billion euro rescue package for the company, but it proved to be insufficient. The German state is being forced to inject more cash to buy the majority stake in Uniper held by Finnish utility Fortum – the price was set at €1.70 per share.
After the deal was announced, Fortum’s stock jumped 14 percent to 13.82 euros on the Helsinki Stock Exchange, according to Reuters. The German finance ministry announced that after the completion of the capital increase and the acquisition of Fortum’s stake, the government will own 99% of Uniper. “The government has shown that it is doing everything possible to keep businesses stable in the market,” Economy Minister Robert Hambeck told reporters.
He added that the government would impose a surcharge on natural gas consumers from early October to help importers cope with increased costs.
German gas importers have sunk into the red because they cannot pass on import cost increases directly to consumers.
Meanwhile, the government, political parties and public opinion in Finland are lashing out at the extensive losses incurred by Fortum due to its participation in Uniper. The Finnish company said that under the deal it would have to take back a €4bn loan package and also divest itself of another €4bn of guarantees it had given Uniper earlier this year.
