Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
is that the Social Security system in France (not just pensions, but also unemployment insurance and healthcare) is only in deficit because it's been raided by the government. One of the main routes to do that has been the exemption for business to pay social security charges on low wages (from minimum wages to a threshold, I think 1.4 times that). This is government policy, but the money is taken from the Social Security budget; government is supposed to compensate SS for this, but has a poor track record of actually doing it (or does it correctly the first year, but then puts indexation rules that makes it increasingly less true over time).

A little bit of digging would be needed to find all the numbers, but basically, the Social Security would be in balance now and for the foreseeable future without this.

Some will say that the deficit is just moved from one place to another, but this does matter, as the hole is social security is plugged via worse services, higher contributions (almost exclusively on labor) or smaller transfers, whereas the lower hole in the government budget can then be used to justify tax cuts for the rich, or the lack of tax increases or cuts in other, less needed services (the army, etc).

Just like the SS surpluses in the US are seeing various attempts at being hijacked, the French Social Security system has seen a lot of its sound finances hijacked for other purposes.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Sat Oct 23rd, 2010 at 09:14:32 AM EST
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