EU-seminar 14th of SeptemberEU-seminar 14th of September20122012Ministry of Health and Social Affairs Ministry of Health and Social Affairs

STOCKHOLMSTOCKHOLM

The social priorities of the new The social priorities of the new French GovernmentFrench Government

Summary

1. 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 …

2. Focus on the reform of the French social protection

3. The new French Government has carried out a first set of social measures, in accordance with the commitments made by François Hollande during his election campaign

1. The major social conference organized on July 9-10 2012 set out the Government's 7 new priorities for social policy :

I. To improve employment, especially youth employment

II. To improve skills and lifelong vocational training

III. To ensure fair and effective pay systems

IV. To achieve equality at work between women and men and improving the quality of work life

V. To ensure pensions and social protection for the future

VI. To provide necessary conditions for industrial recovery

VII. To modernise the public administration in accordance with civil servants

1. 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 conference is to create an ongoing discussion on social reforms

2. Focus on the reform of the French social protection State of the social protection in OECD

Public social expenditure by broad social policy, in % of GPD, in 2007

France (28.4)Sweden (27.3)

Austria (26.4)Belgium (26.3)Denmark (26)

Germany (25.2)Finland (24.9)

Italy (24.9)Hungary (22.9)Portugal (22.5)

Spain (21.6)Greece (21.3)

Norway (20.8)Luxembourg (20.6)

United Kingdom (20.5)Slovenia (20.3)

Netherlands (20.1)Poland (19.8)

OECD-34 (19.2)Czech Republic (18.8)

Japan (18.7)Switzerland (18.5)

New Zealand (18.4)Canada (16.9)Ireland (16.3)

United States (16.2)Australia (16)

Slovak Republic (15.7)Israel (15.5)

Iceland (14.6)Estonia (13)Chile (10.6)

Turkey (10.5)Korea (7.6)Mexico (7.2)

Source: OECD (2010), Social Expenditure database, 1980-2007 (www.oecd.org/els/social/expenditure).

Note: Countries are ranked by decreasing order of public social expenditure as a percentage of GDP. Spending on Active Labour Market Programs (ALMPs) cannot be split by cash/services breakdown; they are however included in the total public spending (shown in brackets)

Cash benefits Services7,56,66,87,36,57,86,16,65,26,66,15,95,76,46,85,66,04,65,85,86,35,67,17,05,87,25,75,24,35,74,03,74,13,52,6

2,96,9

1,41,8

5,71,93,7

2,90,6

1,71,4

4,41,6

3,50,9

3,00,6

2,11,0

1,8

1,62,9

0,9

2,23,2

0,60,1

1,42,3

0,9

1,6

1,0

2,6

0,9

0,6

0 2 4 6 8 10 12 14 16 18

Health

All social servicesexcept health

12,57,2

12,38,95,5

10,78,3

14,19,1

10,88,0

11,94,76,55,49,64,7

10,67,07,48,86,44,34,23,66,03,45,84,8

5,25,26,11,71,4

4,65,6

5,37,2

7,04,06,0

2,85,3

4,05,1

2,05,4

5,74,5

3,95,3

3,53,9

4,41,6

4,35,1

2,55,3

2,04,0

3,54,0

0,90,1

0,80,9

1,93,7

3,1

024681012141618

Income support to theworking agepopulation

Pensions (old age andsurvivors)

2. Focus on the reform of the French social protection State of the social protection in OECD

Public social expenditure by broad social policy, in % of GPD, in 2007

Sweden

90

100

110

120

130

140

150

2007 2008 2009 2010 2011 2012

8

10

12

14

16

18

20

22

24

26

28

30

France

90

100

110

120

130

140

150

2007 2008 2009 2010 2011 2012

8

10

12

14

16

18

20

22

24

26

28

30

32

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

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

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

3. The new French Government has carried out a first set of social measures, in accordance with the commitments made by François Hollande during his election campaign

Urgent 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 qualifications constitute 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)

Appendix

Annual spending growth rate in the health-care sector(converted into national currency, 2005-2010)

0,9%

1,3%

1,9%2,2%

2,3%

3,4%

3,7%3,9%

4,3%

4,7%

0%

1%

1%

2%

2%

3%

3%

4%

4%

5%

5%

France Italie Japon* Suède Allemagne Royaume-Uni Canada États-Unis Australie* EspagneSource : Eco-Santé OCDE.(*) : 2005 - 2009