François Bayrou, France’s latest embattled prime minister, is blaming the country’s 19 million over-60s for pushing state finances to the brink.
Looking likely to be the latest French leader to fall on his sword, Bayrou is going down fighting — albeit fighting old people.
The working-age population faces “slavery,” he said, because it’s having to repay “loans that were light-heartedly taken out by previous generations.”
Bayrou wants to force through €43.8 billion worth of budget cuts to bring French spending under control. But he faces a largely hostile French parliament, with the left and the right signaling they will vote him down at a confidence vote he’s called on Sept. 8.
Where France, the EU’s second-largest economy, is going, the rest of the continent will probably follow.
Not only do the country’s unsustainable finances threaten to drag the rest of the EU into a debt crisis of the kind that rocked the eurozone a decade and a half ago, but France’s troubles foreshadow a phenomenon that’s going to hit pretty much every European country sooner rather than later: Populations are getting older, meaning there are fewer workers to pay for an ever greater number of pensioners.
How governments tackle that could be the challenge of our age.
Not OK, boomer
Bayrou, born in 1951, is blaming his fellow boomers. The over-60s make up over one-quarter of France’s population ― a share that is expected to rise to a third by 2040. They are either drawing a pension or about to, putting increasing pressure on France’s exploding public debt, which now exceeds €3.3 trillion.
The centrist prime minister, allied to President Emmanuel Macron, staked his reputation on insisting there’s no alternative to a path of fiscal rectitude. France’s €400 billion annual pensions bill is equal to 14 percent of national gross domestic product. The costs will increase by €50 billion by 2035, while a decade later the bill will be a cool half a trillion euros.
Bayrou, a former justice and education minister who has tried three times to become president, has long been a proponent of putting the national books in order. But going after the oldies in such a blatant way is a new twist.
That’s probably because he knows he’s got little left to lose. As France’s third prime minister in a year, Bayrou has served a little under nine months and doesn’t look likely to make it past that.
France’s Socialist party, which Bayrou would once have counted on as an ally, has turned its back on him over pensions reform — an issue that exploded after the government raised the retirement age from 62 to 64.
Last week, Bayrou warned that young people will be the biggest victims of the ballooning debt.
“All this to help … boomers, as they say, who from this point of view consider that everything is just fine,” he said in a televised interview.
He has since clarified that he never advocated “targeting boomers” ― technically those born between 1946 and 1964 when the postwar population exploded ― but the message is clear: The older generation needs to do some belt tightening.
“There is a risk of cannibalization, whereby we finance the present and the past at the expense of the future, and we are doing this more and more,” said Maxime Sbaihi, a fellow and former director of Institute Montaigne, an economic think tank.
“The French are not aware of the demographic situation in France, they think that France is a young country, that we can stop working at 60, there is a kind of collective imagination that is difficult to shake,” he added. This ignorance, he said, is leading France toward a brutal, painful adjustment of its social system.
To the guillotine!
France’s pensions bill accounts for one-quarter of all government spending; Italy is the only European country paying out a larger share proportionate to its economy. Pensions account for over half of France’s €839 billion increase in public debt between 2018 and 2023, former Treasury official Jean-Pascal Beaufret warned.
“For us millennials, Bayrou’s speech about boomers … will be our Robespierre at the Convention of the 8th of Thermidor,” Ronan Planchon, a journalist for the conservative newspaper Le Figaro, wrote on X, a reference to how the French revolutionary leader was sent to the guillotine after denouncing his own compatriots.
Pensions have long been a political taboo, with France nearly always seeing street protests whenever an overhaul is mooted. Fresh demonstrations are planned for Sept. 10.
But given the country’s aging population, politicians are reluctant to challenge a group that represents a big slice of their vote, and that holds the lion’s share of the country’s wealth and savings.
Compared to other items on the budget, pensions are particularly hard to adjust, said Hippolyte d’Albis, an economist and professor at the ESSEC Business School.
“It’s an expenditure that is binding on society because the parameters that determine it — most notably the annual indexation of basic pensions — are set by law and can only be changed by passing a new law,” he said.
In 2024 the national deficit stood at 6.1 percent of GDP — double the 3 percent allowed under the EU’s fiscal rules. Paris forecasts that the deficit will not fall below 3 percent until 2029.
Economy Minister Éric Lombard suggested things could get bad enough to require the International Monetary Fund (IMF) to bail the country out — treatment usually reserved for financial basket cases like Argentina. He backtracked a few hours later after a large wobble in the stock market.
The markets are already well aware of France’s troubling fiscal trajectory; the country has already had its credit rating cut by the major credit ratings agencies. It’s now a stone’s throw away from seeing its borrowing costs surpass those of Italy, long a byword for reckless spending and unsustainable debt.
France’s pensions system is unbalanced, but in demographic terms the country is actually a lot better off than many of its peers, with the second-highest fertility rate in the EU, at 1.7 births per woman. Italy and Spain, for example, face an even more stark fiscal cliff as the population ages, with only 1.1 to 1.2 births per woman.
“France is the developed country where the standard of living in retirement is the highest compared to the average standard of living of working people,” said Thierry Pech, director general of progressive think tank Terra Nova. He said that raising the working age, which France has already done, is in some ways the “most brutal method.”
“It wouldn’t be unfair to involve the wealthiest retirees,” he said. “But it would require a bit of political courage and a lot of education.”
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