French pension plan clears first hurdle

France’s National Assembly approved a sweeping retirement reform plan today, including a highly contested measure to increase the retirement age from 60 to 62.

The lower house of parliament voted 329-233 today to pass the broad retirement package, clearing a crucial first legislative hurdle and sending it on to the Senate for debate starting on October 1.

The vote followed a boisterous overnight session on one of the pillars of conservative President Nicolas Sarkozy’s reform agenda, and a prime target of France’s powerful unions.

The vote puts France on track to become the latest European Union country to require workers to stay on the job longer because of a deficit-plagued pension system.

Passage was all but certain because Mr Sarkozy's allies had a majority in the assembly. But left-leaning opponents, emboldened by huge protests across France last week when more than one million people took to the streets, mustered loud and vociferous opposition as the vote neared.

Today hundreds of protesters waving banners and shouting “We are mistreated” rallied on the Place de la Concorde – across the Seine River from the Assembly - to demand that the government scrap the plan.

Inside the chamber, Assembly President Bernard Accoyer cut short an increasingly boisterous overnight session and blamed critics for trying to stall debate on the bill. In response, Socialists angrily shouted “Resign!”

The central and most controversial reform requires workers to stay on the job until 62 to collect a full state pension.

Even then, France would still have one of the lowest retirement ages in Europe. In contrast, Germany recently raised its retirement age from 65 to 67 to offset a shrinking, ageing population, and the US is also gradually raising its retirement age to 67.

Major labour unions plan an open-ended strike starting on September 23 over the measure.

A week ago, at least 1.1 million people turned out in 220 French cities to protest against the proposals, and a strike disrupted trains, planes, hospitals and mail deliveries across the country.

The controversy comes as Mr Sarkozy’s government is battling heavy criticism over its newly energised policy of deporting gypsies, also known as Roma, who lack residency papers back to their home countries, mainly in Eastern Europe.

Mr Sarkozy’s approval ratings are hovering near the lowest levels since he took office in 2007.

Critics fear the pension reforms will erode one of France’s hard-won labour achievements, but proponents say the country cannot afford to have its state-backed retirement programme running deficits for years as French citizens live longer.