France: Deficits, Pensions – Signs Of The Economic Times …

• May 23rd, 2010
• Posted by EUEditor

The French government wants to write it into the Constitution, that budgets have to be kept in surplus, and the newspaper Le Monde says it is also planning a move to extend the pension age.

TIGHT VOTE ON ANY BUDGET MOVE

The government will run into difficulty getting the 60% parliamentary vote it would need to amend the constitution on budget balances, says Le Monde.

Opposition members from the Socialist Party have called in “surrealist”, as a measure committing governments to a position they could never actually guarantee.

The proposal agreed to in a conference of government members last week (20.5.10), would make it law for every new government to write a budget surplus into its legislative program, or if moving to a deficit, specify how it might move to surplus later.

The immediate inspiration is the demand from the European Commission  for strict compliance with agreements on budget practice, from country to country, to keep the shared Euro currency stable.

(Sixteen of the 27 EU member states so far participate in the “Eurozone”, and to maintain the Euro they agree to limits on their deficits and national debt; the paying of fines if they deviate from the agreed guidelines, and setting of interest rates by the European Central Bank; see EUAustralia, “Tight times …”. 10.2.10).

It’s also a point of ideology favoured by the conservative government of the day – low taxes, low spending, fewer services.

WORK ON, OLD MATE!

On those same lines, a move to extend the age for maturity for state-backed contributory superannuation, the age pension, from 60, would ease pressure on state finances.

Demographic pressure with the ageing population helps the argument, Le Monde offering figures, that anticipated extra revenue in the coming ten years of €600-million (A$1.5-billion; dcerates.com, 23.5.10) may be set against extra costs of €3-4 – billion (A$4.5-6-billion).

It says proposals for the change are likely to be put forward after 1.1.11.

Reference

Le Monde, Paris, “Incertitudes autour de la révision constitutionnelle sur les deficits”, (Doubts over the constitutional change on deficits), 22.5.10; “Retraites: l’âge légal de 60 ans devrait être remis en cause dès le 1er janvier” (Retirement: The legal age of 60 to be reviewed next year), 22.5.10. http://www.lemonde.fr/politique/article/2010/05/22/ … (23.5.10); http://www.lemonde.fr/politique/article/2010/05/22/retraites-le-gouvernement-cherche-3-a-4-milliards-de-recettes-nouvelles … , (23.5.10).

Pictures – city-photo.org

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