France
is to "preserve" the "heritage" of its pension
system by increasing payroll taxes, the Prime Minister has said.
Jean-Marc
Ayrault emerged from intensive talks with industry representatives
with plans for what he called "responsible" reform.
The
deficit in France's pay-as-you-go (PAYG) system is expected to hit
EUR20.7bn (USD27.7bn) by 2020. To compensate, employers and employees
will have to pay more in contributions, with rates to rise by 0.3
percent in 2017. This will equate to roughly EUR4.50 a month for a
worker on the minimum wage.
Many
will also be affected by what effectively amounts to a change in the
retirement age. The minimum number of contribution years required for
a worker to receive a full pension will rise from 41.5 years to 43
years by 2035.
"It
will lead little by little to a rise in the effective age of
retirement and it is because of this that this is a major structural
reform," Ayrault said.
The
initiative was immediately condemned by Pierre Gattaz, head of
France's employers' confederation. He called the reform "dangerous"
and unacceptable, telling Le Figaro that "all the Government
does is tax and then tax some more."
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