(AFP/BERTRAND GUAY)
“The purchasing power of retirees is not an adjustment variable,” assured the President of the Republic Emmanuel Macron last June, after the dissolution of the National Assembly.
It won’t be right away. According to a government source this Wednesday, October 2, the draft budget for 2025, which will be unveiled on October 10, provides
a postponement until July 1 of the indexation of pensions to inflation,
and an effort of 60 billion euros to restore public finances.
The retirement pension amounts are
usually revalued on January 1st.
The idea of using indexation to slow down public spending was
in the air since last spring.
Former Budget Minister Thomas Cazenave had alluded to it in February, but the President of the Republic immediately expressed his opposition.
In June, after the dissolution of the National Assembly, Emmanuel Macron repeated his opposition. “I will be very clear, pensions will be well indexed to inflation, the purchasing power of retirees,
it is not an adjustment variable”,
he assured. According to the Director of Social Security (DSS), Pierre Pribille, heard this Wednesday morning in the Senate, the indexation of pensions in January 2024 (+5.3%) represented
“an additional expense of around 15 billion euros”
.
French retirees enjoy a better standard of living than in many other countries
The idea of under-indexing pensions – electorally risky given the large proportion of retirees among active voters – is regularly defended by economists and experts. These remind us that French retirees enjoy a
better standard of living, in relation to workers, than in many other countries.
According to the 2024 report from the Retirement Orientation Council (COR), which made a comparison with 11 Western countries, France and Italy present the most favorable situation for retirees, with a standard of living for those aged 65 and over which represents respectively 96 and 98% of that of assets.
Belgium and the Netherlands are at the bottom of the ranking,
with a standard of living equal to 78 and 79% of the population.
The COR also notes that in France, the decline in the average standard of living after age 75, observed in all countries, is
among the weakest
(-7 points on the standard of living of 65-75 year olds, compared to -26 points in Sweden). Postponing the date of entry into force of indexation is
another way to deindex,
indicated in a note in June Ifrap, a very liberal think tank. According to Ifrap, these date extensions have already been used by the government in 2009, 2014, 2015 and 2018. “In total,
since 2013, pensions will have ‘lost’ 2 years and 9 months of revaluation”,
he clarified.
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