French Prime Minister boosts survival chances by ditching pension reform

French Prime Minister Sebastien Lecornu told Parliament on Tuesday he would suspend pensions reforms until the 2027 presidential election, boosting his chances of staving off a no-confidence vote.

Mr Lecornu gave an eagerly anticipated speech after he was reappointed Prime Minister on Friday. His previous mandate lasted only 27 days due to political infighting over his cabinet selections.

"I will propose suspending the 2023 pension reform until the presidential elections," he said. "No increase in the age will take place until January 2028."

The move is likely to ensure his political survival after socialists, the only major opposition group that had not immediately called for Mr Lecornu to go, had demanded major concessions on pension reforms, a cornerstone of president Emmanuel Macron's policies. The reform would raise retirement age from 62 to 64.

France entered a period of political instability last summer after snap elections yielded no clear majority. Parties disagree over how to tackle the budget crisis, such divisions leading to the ousting of Mr Lecornu's two predecessors.

The far left and far right have already filed their own no-confidence motions, which will go to a vote on Thursday morning. They have called for snap elections and for Mr Macron to step down, arguing that France needs a clear break from his policies. The far right would be expected to win if elections were held today.

Should Mr Lecornu fall this week, experts believe Mr Macron would have little choice but to dissolve parliament and call new legislative elections.

In his speech, Mr Lecornu, who vowed to not pass bills without parliament votes, as his predecessors did, also suggested launching a national conference on pensions that would give its opinion before the presidential election. "I am taking steps forward," he said. "Everyone should do the same."

Mr Lecornu presented his budget to some legislators on Tuesday, proposing €30 billion ($35 billion) in cuts, and targeting a deficit of 4.7 per cent. France's independent fiscal watchdog said those plans were wishful thinking and his belt-tightening measures may fall short.

The Prime Minister warned that delaying pension reforms would come at a cost of €400 million in 2026 and €1.8 billion in 2027. "It will have to be financially compensated, including through savings measures; it cannot be achieved at the cost of an increased deficit," he said.

Speaking after Mr Lecornu, the head of conservative Les Republicains party Laurent Wauquiez said he regretted that the socialists' demand to delay pension reforms had been adopted by Mr Lecornu. "Do we want to destroy everything or make an effort?" Mr Wauquiez said.

France's debt-to-GDP ratio is the European Union's third-highest after Greece and Italy, and is close to twice the limit of 60 per cent fixed by EU regulations.