The social priorities of the new French Government Septembre 2012

1. The social priorities of the new French Government Septembre 2012

2. Summary • The major social conference organised this past July on the initiative of the new President of the French Republic François Hollande determined the path for reforms of social protection in many fields … • Focus on the reform of the French social protection • The new French Government has carried out a first set of social measures, in accordance with the commitments madeby François Hollandeduring his election campaign

3. The major social conference organized on July 9-10 2012 set out the Government's 7 new priorities for social policy : • To improve employment, especially youth employment • To improve skills and lifelong vocational training • To ensure fair and effective pay systems • To achieve equality at work between women and men and improving the quality of work life • To ensure pensions and social protection for the future • To provide necessary conditions for industrial recovery • To modernise the public administration in accordance with civil servants

4. The major social conference organised on July 9-10 2012 set out the Government's 7 new priorities for social policy Method and time scale • The first ambition of the social conference is : To establish a « road map » and clarify each of the 7 priority theme areas intended to be reformed in 2013 • The President of the French Republic indicated that an assessment will be done in one year, which could lead to update the « Social road map » • The aim of the major social conferenceis to create an ongoing discussion on social reforms

5. Focus on the reform of the French social protectionState of the social protection in OECDPublic social expenditure by broad social policy, in % of GPD, in 2007

6. Focus on the reform of the French social protectionState of the social protection in OECDPublic social expenditure by broad social policy, in % of GPD, in 2007 Projected annual growth in real public social spending and real GPD, Index 2007=100 and public social spending as a %GPD (right scale), 2007-2012 : the situation in Sweden and in France Real public social spending Real GPD

7. 2. Focus on the reform of the French social protection Two priority topics for reform • PRIORITY 1: The reform of the French social protection should firstly focus on its funding : Two identified issues • To widen and diversify the sources of funding that are mostly based on labour income… • …in order to reconcile economic growth (competitiveness) and social justice[… and to amend our social model and to improve it] • PRIORITY 2 : The reform of the retirement pensions :Two identified issues • To reach a pre-determined age should no longer be the only indicator used to activate someone's retirement : the number of years of employment could be another option or an increase in the number of years of work needed to qualify for a full pension • To make the pension system financially sustainable

8. 2. Focus on the reform of the French social protection …. … following a specific method and time scale • PRIORITY 1 : Regarding the social protection funding : • The French Government is going to contact the High council (committee of experts) on social protection funding • Early 2013 : delivery of the report by the High Authority and, in cooperation with the Social Partners, a legislative solution to the issue should be determined in the course of 2013 • PRIORITY 2 : The reform of the retirement pensions : • End of 2012 : Delivery of the report on the state of retirement pensions and their financial prospects, by the Retirement guidance council • Spring 2013 : Consultation with the social partners regarding the desirable changes in retirement pensions

9. 3. The new French Government has carried out a first set of social measures, in accordance with the commitments madeby François Hollandeduring his election campaignUrgent measures to enhance social justice and employment • The increase of 25% of « back to school allowance » paid to families, in September 2012, to a cost equivalent to 372,0 million Euros (just over SEK 3 billion) / regulatory action (decided in May 2012) • Extending the option of retiring from the age of 60, under the system of early retirement for long careers (individuals reaching the age of 60 in 2012) : to a cost equivalent to 3 billion Euros for 2017 (almost SEK 25 billion), covered by an increase in the pension taxes / regulatory action (decided in May 2012) • Creating 100 000 jobs for the future in 2013 (full-time job), with public funding, up to a maximum of 75 % of the estimated total investment cost : unemployed young people up to the age of 25 years without school-leaving qualificationsconstitute the target of the Government (decided in August 2012) • Asking the Unions to negotiate a collective agreement facilitating at the same time the recruitment of young jobseekers while older workers keep their jobs, in return of maintaining exemptions from social security contributions (decided in September 2012)

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