French PM bows to pressure with extraordinary move to save his job

Paris: French workers have gained a reprieve from an increase in the pension age after the nation’s new prime minister caved to political pressure by pausing a budget savings plan that sparked riots two years ago.

In an extraordinary move to save his job, Prime Minister Sebastien Lecornu halted the plan to lift the pension age from 62 to 64 after his opponents demanded the change in talks over his future.

The backdown blows a hole in the national budget and pauses a hard-won reform that President Emmanuel Macron imposed two years ago when he and others urged citizens to accept cuts to national spending.

But it appears to have gained time for Lecornu to establish a new government after Macron restored him to the prime minister’s job last Friday, four days after he stunned the country by quitting.

France is trapped in its worst political crisis in decades due to chronic disputes over leadership and national policy, with no party holding a majority in the national assembly to break the impasse.

The national assembly has dispatched four prime ministers in two years and may yet see off a Lecornu unless his retreat on pension reform mollifies rivals who oppose unpopular budget savings.

Macron has tried to put the responsibility on the parties on the left and right to support the centrist government and its prime minister, who has been a close supporter of the president for many years.

“It is everyone’s duty to work towards stability,” Macron said on Monday in Egypt, where he joined US President Donald Trump to discuss peace in Gaza.

National Rally, the right-wing party led by Marine Le Pen, has called on Macron to resign and allow a presidential election to end the instability, but Macron appears determined to hold on and hope the new government can survive.

Lecornu and his ministers approved a draft budget in a meeting with Macron on Tuesday, and the president warned that any vote to bring down the government would lead him to dissolve the national assembly. This would trigger a vote on the assembly members, not the presidency.

The pension age was due to increase from 62 to 64 in stages over the next few years, in a similar phased approach to Australia’s increase in the pension age from 65 to 67, which took six years to take effect.

France lifted its retirement age from 60 to 62 in 2010, but could not agree on another increase. Macron overcame that by lifting the age to 64 without a vote in the national assembly.

Lecornu did not scrap the change but suspended it instead, and he said it would not apply before the presidential election due in 2027. This appears set to make it a key election issue for the candidates seeking to replace Macron, who must leave the post after two terms.

Australian National University professor Peter Whiteford estimated two years ago that public pension spending in France was 13.6 per cent of GDP, compared to 4 per cent in Australia.

The arguments centre on ways to save money when the national government’s debt has climbed to €3.3 trillion ($5.9 trillion), or about 114 per cent of gross domestic product, the third-highest level in the European Union after Greece and Italy. Lecornu is proposing more than €30 billion ($54 billion) in savings.

‘Dramatic for France’

French economist Philippe Aghion, named one of the three winners of the 2025 Nobel Prize in Economics on Monday, said a path out of the budget mess was needed.

“I hope there will be a compromise because the tragedy for France is to experience political instability,” he told reporters in Paris prior to the suspension announcement.

“If there is another censure, it would be dramatic for France. Our interest rates would continue to rise, our spread would continue to rise; it would be dramatic. We must absolutely avoid censure and still arrive at a budget.”

National Rally has lodged a motion in the national assembly to bring down Lecornu and his cabinet, which he named on Monday.

The left-wing party La France Insoumise, also known as LFI or France Unbowed, also wants to remove the government.

Lecornu has gained a chance to hang on to power, however, with Socialist parliamentary chief Boris Vallaud welcoming the change to the age pension.

The Socialists and the Communists said they would not vote Lecornu out, while the Republicans sent a similar message.

With Reuters

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