IMF supports pension reform
Posted Jan 30, 2023, 5:57 PMUpdated on Jan 30, 2023 at 5:58 PM
The International Monetary Fund (IMF) lent its support on Monday to pension reform on the eve of one day strike believing that it would help France save money while strengthening the labor market.
“Sustained fiscal consolidation focused on spending will be essential to rebuild financial buffers and put debt back on a firmly downward path,” the Washington institution wrote in a document released on Monday assessing French economic policy. According to the international organization, “the establishment of unemployment insurance reform and pension reform can provide some of this necessary adjustment. The reduction in expenditure as well as other reforms must also allow it, judges the IMF in this document entitled Article IV.
“Increasing the labor supply”
The highly contested pension reform, which began to be examined on Monday in the Social Affairs Committee in the National Assembly, provides for a decline in the legal age from 62 to 64 and an acceleration of the extension of the contribution period, to the chagrin of the unions which are organizing a new day of mobilization on Tuesday.
The members of the Monetary Fund “welcome the recent adoption of the unemployment insurance reform and the upcoming pension reform, which will help to increase the labor supply”, specifies the institution.
Already in November, the international economic institution had mentioned a reform of pensions as a way of reducing public spending, in the same way as the reduction of tax loopholes or better targeting of aid granted to households and businesses to cope with the energy crisis caused by the war in Ukraine.
On the aid provided in response to repeated crises, “whatever the cost”, the IMF believes that French support has “made it possible to cushion the impact but was costly, poorly targeted, and a source of distortions” and always calls for more targeted measures towards the most vulnerable. In November, he said he feared “a slight widening of the deficit” in 2023, citing the extension of energy measures and the continuation of the abolition of production taxes for companies.
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