France lifts retirement age to 62
French President Nicolas Sarkozy’s government said it will raise the retirement age to 62 and increase taxes on capital, seeking to stem losses in the pension system and safeguard the nation’s top credit rating.
The retirement age will rise gradually to 62 by 2018 from 60 at present, Labour Minister Eric Woerth said at a press conference in Paris today.
The government will increase taxes on stock options, dividends and capital gains, and will raise the top income-tax rate one percentage point to 41pc.
“We can’t see France as an infinite reservoir of new taxes,” Woerth said. “This reform is reasonable and efficient.”
Raising the retirement age will save €19bn by 2018, while the tax increases will bring in €3.7bn next year, Woerth said.
By lifting the retirement age, France is joining European countries including Germany, Spain and Italy that have moved to stem losses in pension systems under stress from longer life expectancies and declining birth rates.
France’s state pension fund will lose €10.7bn this year after €8.2bn in 2009 and €5.6bn in 2008, the government estimates.
The reform is aimed at bringing the system back to balance by 2018.