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Hollande defends pension reform amid growing critics

21 June 2013 00:37 (UTC +04:00)

Baku-APA. French President Francois Hollande on Thursday justified his government's plan to reform the country's pension system in a bid to cut deficit and create enough wealth to digest the double digit unemployment rate, APA reports quoting Xinhua.

During the Socialists' second social conference, Hollande stressed that "prolonging contribution period is the fairest solution for pension reform."

Looking to reach a healthy financing retirement system by 2020, the government wanted to garner 7 billion euros (9.26 billion U.S. dollars) by reforming the pension system which reported 20 billion euros in annual deficits.

With the aim, the government wanted to align the maximum rate of generalized social contribution (CSG) of retired people with that of active citizens and revise certain tax benefits to retirees that will help the country to collect 2 billion euros over the period.

In the longer term, it is working to "closer further the rules applicable to public workers of those used in the private sector."

"The duration and contribution rate are the same and especially the replacement rate paid to public workers is the equivalent to the private sector's salaries," Hollande said.

"If I look at the evolution in recent years, it is less favorable for employees than for private agents. It is not to be silent on the subject but to objectively look at the facts and see the conclusions that it should be drawn," he added.

However, Hollande's fresh proposals failed to reassure social partners that fear further deterioration of French revenue and purchasing power.

"We did not want the younger generations to work 70 years," complained Jean-Claude Maily, the head of FO.

To Medef's leader Laurence Parisot, "it's an illusion to believe that we can restore the balance of the pension system in the short and long terms by simply changing parameters of contribution ... ," she said. (1 euro = 1.32 U.S. dollar)