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French go nuts over retiring two years later

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October 18, 2010 – Comments (13)

According to the BBC, strikes in France have choked off the fuel supply:

*"About 1,500 petrol stations in France have run dry or are about to close as fuel supplies are hit by strikes over government pension reforms, officials say."

*"Workers at France's 12 oil refineries have been on strike for a week and entrances to many of the country's fuel distribution depots have been blocked."

*"Half of flights to and from Paris's Orly airport and one in three flights at other airports are being cancelled, according to aviation officials."

What has Frenchpeoples breaking shop windows and burning cars?

"The government wants to raise the retirement age from 60 to 62 and the full state pension age from 65 to 67."

I don't know enough about France's finances to make a definitive judgment. But this strikes me as an overreaction. Anyone have other thoughts?

Robert Brokamp, CFP®, is the senior advisor for the Fool's Rule Your Retirement service.

13 Comments – Post Your Own

#1) On October 18, 2010 at 2:47 PM, lctycoon (< 20) wrote:

Even at 62, that would still be one of the lowest retirement ages in Europe, let alone the rest of the developed world.

France's finances aren't that great. They're not as bad as Greece or the Mediterranean countries, but the 8% deficit is still too high for the European Union.

This strikes me very much as being a sense of entitlement more than anything. Just about every country in the world that has a national pension system is going to have to make some hard decisions in the next few years.

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#2) On October 18, 2010 at 2:48 PM, miteycasey (95.17) wrote:

No thoughts. Pretty normal for a 'socialist' leaning country.

The USA will be there in a decade or two.

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#3) On October 18, 2010 at 4:22 PM, TDRH (99.85) wrote:

Social security payments exceeded revenue for the first time this year, it was not supposed to happen until 2016. Tough decisions lie ahead.

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#4) On October 18, 2010 at 4:27 PM, BillyTG (32.97) wrote:

Sounds quite normal for Europe. Greece is having riots right now, too. Pretty much every industrialized/Westernized economy in the world has some serious issues right now. If the US goes down, the rest will follow.

Most European countries have long histories of protest. I'm most familiar with Italy, where strikes of autostrada toll booth workers, rail workers, etc. are commonplace (as in every month or two, so often that the public knows and plans around the strike schedules). I don't think there's anything wrong with people fighting as a group for what they think is right. I'd be pissed, too, if I lived in a socialist system where the government promised me a nice retirement...then when I turned 62, after decades of work, the government says "haha just kidding, work a couple more years for us, no seriously, you can trust us."

I agree with Ictycoon that Europe has some hard decisions to make. You have all these countries with varying levels of production, quality of life, retirement ages and benefits, yet they are all working under the same currency. This is what pisses off Germans, who are pulling more than their fare share.

As for France, it was just a few years ago when they had some very serious rioting and violence, with a high unemployment rate, particularly among low-skilled young men.

In the US, many labor unions (auto, teachers, pilots, etc) are enormously powerful and get what they want (have you seen the new documentary Waiting For Superman?) without too much hassle other than public lawyering. Major labor strikes are much more infrequent.

Like miteycasey, I think the European civil issues are what we in the US can expect. I think, however, that it will be in the next year or two or three. I also believe that Americans are generally more aggressive and much better armed than citizens of most other countries. We are also very much a police state, with public dollars paying for a lot of tough, well armed security. So things could get a little crazy.

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#5) On October 18, 2010 at 4:35 PM, vriguy (80.61) wrote:

Not only are many Americans armed, but I suspect some states will forcibly resist Federal intrusion into non-Federal matters too. All in all, yes it could get a little crazy in a year or two.

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#6) On October 18, 2010 at 5:03 PM, SkepticalOx (99.43) wrote:

I don't think the Americans are as bad off as France, or worst yet, Greece.

However, I think this is why it's important to cut spending AND cut taxes. The problem with austerity programs that don't have huge public backing is that it cuts spending and taxes more, so you get less and get less of your wage. In Britain it's fine because there's political will to do it from the masses. Hopefully Americans will wisen up when austerity measures are needed.

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#7) On October 18, 2010 at 5:17 PM, miteycasey (95.17) wrote:

@#6

They won't wisen up. Too many palms getting greesed.

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#8) On October 18, 2010 at 7:32 PM, MenRBetter (24.59) wrote:

the us is crazy just different kind of crazy. Look at how fat americans are. Corperate farmers and corn is in every us meal . Watch the movie King Corn. Incredible really, 40 million paid NOT to work. Farmers paid not to plant.

Different insanity

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#9) On October 19, 2010 at 12:01 PM, russiangambit (29.94) wrote:

I don't expect riots in the US,US has very different culture. Europe has "group" mentality and US has "individual" mentatlity. It is very hard to organize americans in any sort of movement unless it is some hot button issue like abortion, which is religion based. Taxes are another hot button issue which affect all the americans in are they care most - wealth and money. But hey,as an issue of reserve currency US doesn't really need to have taxes. Taxes can always be lowered to placate the population.

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#10) On October 19, 2010 at 12:40 PM, XMFPhila100 (93.17) wrote:

Isn't France on its fifth republic? I guess it's time for number six!

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#11) On October 20, 2010 at 12:35 AM, BillyTG (32.97) wrote:

@Menrbetter,

I watched King Corn.

What have we become?

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#12) On October 22, 2010 at 8:41 PM, TMFHockeypop (< 20) wrote:

How to reign in spending right???? Look to our neighbors to the North. This is a great story about Canada's efforts to bring sanity to its financial situation in about 1995 on John Mauldin's blog. http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2010/10/18/o-canada.aspx

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#13) On November 13, 2010 at 12:31 PM, 4melody (< 20) wrote:

Will be interesting to see how the US will react when and if the retirement age is raised here. You will always have those that protest just to protest!

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