Pension reform: will the bill succeed in filling the deficit?

Barthélémy Philippe, edited by Alexandre Dalifard 06:21, March 07, 2023

A reform less profitable than expected?

Since the beginning of the examination of the text in parliament, the government has multiplied the concessions, while the pension system is threatened by an imbalance of 13.5 billion euros by 2030. And that costs money .

So much so that the objective of a return to the balance of the system wavers.

The Minister of Labor Olivier Dussopt himself acknowledged that the coffers of the general scheme could show a slight deficit of 300 or 400 million euros in 2030, and this despite the reform.

Moreover, it should be remembered that the government made a risky gamble by basing its reform on a very optimistic economic scenario.

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Two conditions to respect

The costing of the reform is based on 1% growth and full employment at the end of the five-year term.

That is to say an unemployment rate of less than 5% against more than 7% currently.

Without these conditions, the reform will be less effective than expected, as economist Anne-Sophie Alsif explains.

"Maybe it won't be 13 billion, maybe it will be less. There will be budgetary leeway, after that will it be enough or not to make up the deficit? government scenario that occurs and not, if there are other cyclical factors that come to hold up growth or other indicators such as unemployment or productivity. What can really derail the scenario is to have a new crisis or and to go into recession."

For now, most economists expect growth below the executive's forecasts.

Regarding the unemployment rate, estimates remain above 7% by the end of the five-year term.

However, weak growth and more unemployed means less revenue for the pension system.

The government's bet is therefore far from won.