Pension Age to be Lowered in France
The new French President, François Hollande, recently bucked global trends by announcing that the pension age would be reduced from 62 to 60. With the retirement age sliding in the opposite direction in many other countries, this will be seen as something of a shock, but France are renowned for valuing their work life balance, even introducing a 35 hour working week in 2000.
So what does this mean for the French economy?
Whilst this is seen by much of the French labour force as a welcome change, many economists and politicians alike are hugely sceptical that France can afford this change. Already saddled with national debt accrued during the credit crunch, cost projection are 1.1 billion Euro’s next year, rising to a staggering 3 billion by 2017.
The French government is believed to be looking to pay for this by raising income and corporation taxes, which it is feared will have knock on effects on inflation and unemployment.
Time will tell if this proves to be a good idea, at present, the jury is out.