France may freeze indexation of highest pensions amid budget deficit
The French government is considering freezing or reducing indexation of the highest pensions as part of efforts to cut the budget deficit. The move could affect around 1.4 million pensioners.
The French government is looking for ways to reduce its massive budget deficit, and one option under consideration is freezing or lowering the indexation of the highest pensions, according to "European Pravda," citing BFMTV.
Paris has promised the EU to bring the deficit below 3% of GDP by 2029, which requires savings of roughly 100 billion euros. Pensions are the country's largest spending category, with an annual budget of about 400 billion euros.
Potential savings
Economy Minister Roland Lescure has floated smaller indexation for the highest pensions as one possible option. With inflation projected at around 2% by the end of 2026, such a step could theoretically save the budget up to 6 billion euros.
If the threshold for freezing or reducing indexation of the highest pensions were set at those exceeding 3,000 euros per month, it would affect 1.4 million people — about 8% of France's 17 million pensioners.
Political and legal risks
Such a move is considered risky a year before presidential elections. It is also not legally straightforward, as selective freezing of indexation could be argued to violate the principle of equality among citizens enshrined in the constitution.
In previous years, an unpopular pension reform was accompanied by large-scale protests across the country. Parliament eventually voted to suspend that law after the prime minister and president agreed to the move.
