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Macron Pledges to Complete Pension Reform Despite Resistance

William Horobin

(Bloomberg) -- French President Emmanuel Macron doubled down on his contested plan to transform the country’s pension system, saying in his New Year’s address that it’s a project for “justice and social progress.”

The French leader’s intransigence clashes with defiant labor unions that staged a 27th straight day of strikes to protests his plans Tuesday, despite calls for a truce at Christmas and New Year. The walkout has forced the majority of Paris metro lines to operate only partial services, or shut down entirely, and brought havoc for holidaymakers trying to use the national train network.

“The pension reform I have committed to will be completed,” Macron said in an address from the Elysee Palace in Paris. “I hear the fears and anxieties on the subject; I also hear a lot of lies and manipulation.”

The pension overhaul is a decisive test of whether Macron can impose his economic doctrine on recalcitrant unions. By abolishing 42 different pension systems to create one universal points-based system, the plan exemplifies his overarching push to loosen the rules binding the French economy and challenge the ingrained advantages of some.

Macron has already made unpopular changes to taxes, labor laws and the welfare system, which he said Tuesday are now paying concrete dividends as as unemployment declines.

“I will dedicate all my energy to transforming our country, to make it stronger, fairer and more humane,” Macron said. “I’m aware that changes are sometimes upsetting.”

Next Round

Pension reform is proving the thorniest change yet. The walkout has already run longer than the 1995 strikes that forced the government to back off from changing the state system for retirement and health care.

Leftist unions say Macron’s must entirely scrap his pension reform as they argue it would punish all workers of all ages by forcing them to retire later and with less certainty about the level of their pensions. While some moderate unions support the points system, they are balking at part of the reform that would raise the age for full retirement benefits to 64 from 62.

In an effort to appease unions before Christmas, Macron pledged to give up on his own presidential pension and adhere to the same rules he wants to introduce for all French workers.

Macron also indicated he may offer more concessions, particularly for workers with strenuous tasks who he said should be allowed to retire earlier. Macron has tasked his Prime Minister Edouard Philippe to prepare for another round of negotiations from Jan. 7 during which some elements of the plan could be dialed back as the government courts professions like the police, fire fighters, air traffic controllers and opera employees.

‘New Route’

“I expect Edouard Philippe’s government to find a route to a quick compromise that respects the principles I have repeated,” Macron said.

There were some signs Tuesday that the momentum of strikes may be starting to wane as metro and railway services around Paris improved slightly. French rail operator SNCF plans to operate two of three high-speed trains this weekend, AFP reported, citing SNCF official Pierre Matuchet. “There are more trains because there are fewer strikers,” Matuchet said.

Yet unions are aiming to rev up the demonstrations again once the holiday season ends with calls for a fourth day of nationwide protests Jan. 9. The far-left CGT union is pushing for the protests to shift up a gear and on Monday called for a complete blockade of the country’s refineries from Jan. 7 until Jan. 10.

--With assistance from Geraldine Amiel.

To contact the reporter on this story: William Horobin in Paris at whorobin@bloomberg.net

To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Robert Jameson

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