The French National Assembly voted on Wednesday to suspend until after the 2027 presidential elections the controversial 2023 law that raised the retirement age from 62 to 64 for the majority of employees.
The proposal was adopted with a majority of 255 votes „in favor” compared to 146 „against,” as reported by POLITICO.
Among the supporters of the measure were left-wing parliamentarians from the Socialist Party and the Green Party, as well as from the far-right party Rassemblement National.
On the other hand, opponents included parliamentarians from the far-left party La France Insoumise (LFI), the right-wing party Les Républicains, and the center-right party Horizons.
The majority of parliamentarians from the centrist party of French President Emmanuel Macron abstained.
France is under pressure
Prime Minister Sébastien Lecornu proposed the suspension of the pension reform last month as a compromise to ensure the survival of his government.
The government estimates that suspending the pension reform will cost approximately 300 million euros in 2026 and 1.9 billion euros in 2027, said Minister of Labor and Solidarity Jean-Pierre Farandou on Wednesday.
France is under pressure to reduce its massive debt, and Lecornu has committed to reducing the country's budget deficit to a maximum of 5% of GDP next year.
Although the suspension of the pension reform has calmed internal political tensions, it has raised concerns about France's seriousness in terms of public finance recovery, especially as more employees retire and the population lives longer.
The European Commission has asked Paris to come up with other measures
The European Commission has requested France to offset the fiscal cost of suspending the reform by taking other measures, and rating agencies have warned about the economic impact of this move.
Both Standard & Poor's and Fitch have downgraded France's credit rating to A, and last month Moody's revised France's outlook from "stable" to "negative," highlighting the negative economic impact of suspending the reform and the risk that this deadlock may persist beyond 2027.
The National Assembly, the lower house of the French parliament, had until midnight to adopt the social security budget in full, which focuses on social spending and includes the suspension of the pension reform. The text will then be transmitted to the French Senate.
If the National Assembly rejects the social security budget or fails to organize the vote on time, the Senate will debate the original text proposed by the government.
However, the government has already clarified that it will modify it to take into account all changes approved in the National Assembly, including the suspension of the pension reform.