State Restructuring and Trade Union Realignment: The Pensions Struggle in France

By Gordon, Alex; Mathers, Andy | Capital & Class, Summer 2004 | Go to article overview

State Restructuring and Trade Union Realignment: The Pensions Struggle in France


Gordon, Alex, Mathers, Andy, Capital & Class


In a previous 'Behind the News' article, Jeffreys (1996) provided a convincing analysis of the 1995 French strikes over pension reform, which he represented as the latest fight over 'acquired rights' enshrined in the 1944 constitutional settlement. The events of 1995, triggered by the political exclusion of labour from decision-making, marked the end of labour quiescence. Endorsing the main lines of Jeffreys' analysis, in this paper (1) we examine how the attempt, inspired by European Union (EU) institutions, to include labour politically in the reform process through 'concertation' (2) mechanisms, marks an important difference from 1995. We argue that this approach was disconcerting for trade unions, contributing as it did to division and defeat. Moreover, these events have contributed to a process of union realignment that has accelerated to a point where the distinction, established in 1995, between unions of accompaniment and unions of protest is being superseded by new strategic orientations around the alternative, opposed identifies of 'social partner' and 'social movement'.

In recent years, France has seen its social republican welfare consensus unravelling at an accelerating pace. The main employers' federation, MEDEF [see Glossary for this and other acronyms], has launched an initiative for a new social constitution, advanced tactically through the threat of withdrawal from its co-management role of social protection agency (Bilous et al, 1999). However, the unions present a serious obstacle to this project and a popular, deep-seated attachment to the welfare consensus (Gelissen, 2001) translates into widespread opposition to liberalisation measures. In this context, the welfare state is seen as an 'immovable object' (Pierson, 1998) and radical reform is a high-cost political strategy--a lesson that Prime Minister Juppe was taught in 1995, when pension reform ultimately resulted in electoral defeat. This reality has led to a more pragmatic strategy for breaking the reform impasse, which we call 'social liberalism' (3). By this, we mean the introduction of significant reforms in the name of defending social citizenship rights against proponents of free market solutions. In short, change is presented as modernisation instead of privatisation. This strategy also involves the establishment of consultative mechanisms with civil society organisations, in an attempt to produce consensus for reform proposals prior to legislation. Such a strategy is evident in relation to pension reform and, significantly, has been championed by EU institutions.

Reforming French pensions the European way

The French pension system was a central pillar of the post-war social settlement, and is widely viewed as integral to French citizenship. Both basic and secondary occupational pensions, alongside 'special regimes' for public service workers, are financed on a pay-as-you-go (PAYGO) footing, funded through employer and employee contributions. This method of finance, known as repartition (literally, 'sharing out'), expresses a high degree of inter-generational solidarity and produces public pensions at 95 per cent of average male wages (Johnson, 1999). The French system has, therefore, been described as among the most generous, universal and egalitarian pension systems in Europe (Blackburn, 2002).

Previous attempts at pension reform have met with limited success. Those instituted by the Balladur government in 1993 focused on the private sector, indexing pensions to prices instead of earnings, and lengthening the contribution period. The subsequent Juppe administration attempted to extend these reforms into the public sector, targeting 'special regimes' and proposing tax perks for private pension funds. The Socialist government of Prime Minister Jospin repealed those reforms, and in 1999 introduced the first capitalised, funded pension into the French system. However, this relatively weak co-habitation government was slow in embarking on public sector pension reform. …

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