By Emma Rowley, The Telegraph,06 Jun 2012
France's new socialist government cut the country’s retirement age in the face of the eurozone’s deepening crisis, citing “social justice” to explain a move that goes against austerity efforts across the region.
Workers who entered employment aged 18 will be able to retire at 60 rather than 62, under the decree agreed at a cabinet meeting on Wednesday.
The decision follows pre-election promises from the new president Francois Hollande to reverse the rise in the retirement age introduced by his predecessor Nicolas Sarkozy in 2010.
“We committed to put this measure in place quickly for social justice for those who started working early,” said Social Affairs Minister Marisol Touraine.
The reforms will cost the state billions of euros a year but can be afforded through higher worker and employer contributions, according to the government.
The €1.1bn (£890m) annual cost up to 2017 - €3bn thereafter - will be met by a 0.1 percentage point rise in payroll charges, amounting to an extra €2 a month on the average monthly French net salary of €1,600, it said.
Around 110,000 people are expected to benefit from the measure in the first full year.
Jean-Francois Cope, leader of France’s conservative UMP party, called the policy move “madness”.
“It risks the downgrade of France’s credit rating and at this rate tempts fate,” he said.