Reforms to Pension System Diminish French Deficit

On, September 24, French officials released a projection from the French Project of Law of the Finance of Social Security showing that, following certain revisions to the current retirement system, the budget involving pensions of private sector employees should be at equilibrium next year. This announcement marks the first time since 2004 that the system has not operated at a deficit. The revisions, which include raising the legal retirement age from sixty to sixty-two years, were met with controversy when former Prime Minister Francois Fillon’s government first proposed them in 2010. However, they appear to have been successful in diminishing the French deficit: While the system operated at a deficit of €1.2 billion in 2014, the new projection estimates that there will be a €5 million surplus in 2016.

Healthcare has been a significant issue in the French budget. The French healthcare system is operating at a deficit of approximately €7.5 billion in 2015, which is about €1 billion more than in 2014. Various measures have been proposed to improve the situation, including changing the cost of medications and optimizing efficiency in hospital expenditures. The government also announced on Thursday that she will be launching a public relations campaign aimed at encouraging the French to use generic, off-brand medications. The expected gain from this campaign is approximately €395 million, which, along with the gains from other reforms, will potentially help France restore its balanced budget.