France Heading for Financial Ruin?

French President Emmanuel Macron has been forced to roll back his landmark pension reforms—his most notable achievement in office—to try to get a stable government.

France has some of the most generous pension provision in the developed world. Whereas in most countries retirement age is 66 to 67, in France it is 62, and was due to rise to 64. In reality, many in France retire earlier due to rules about career length.

Prime Minister Sébastien Lecornu has given in entirely to the socialists as he tries to assemble a government. Pension reform will now be delayed until after the 2027 presidential elections. He promised not to force a budget through using controversial constitutional provisions.

The fallout goes much further than immediate issues. Macron and others invested huge effort to pass the pension reform. If even he cannot make it stick, can France’s finances ever be brought under control?

“France continues to believe in the old ideas that are leading it to ruin,” wrote Le Figaro. “Inoculated nearly 50 years ago, the socialist poison continues to wreak havoc.”

Patrick Martin, who runs Medef, France’s biggest employer federation, warned that this would be “a terrible message to the financial markets, signaling that France is unreformable.”

France’s continual weakness is helping push the whole of Europe toward a debt crisis. The result will be a strong leader from Germany controlling the whole project.