For years, Emmanuel Macron has wanted to reform the French pension system, plans that have been accompanied by strong protests from the very beginning. Not only do the opposition and all unions reject Macron’s plans, but according to polls almost 75 percent of the population does as well. Tomorrow, Prime Minister Élisabeth Borne is to present the reform. Among other things, the retirement age is to be raised to 64 or 65. This could trigger unrest similar to the Yellow Vests protests in 2018. Tanja Kuchenbecker reports from Paris.
In 2022, all energy policy revolved around gas. And this year? The electricity market will now come more to the fore, writes Manuel Berkel. However, there will probably continue to be updates on gas storage levels. Read our outlook to find out what the Swedish presidency intends to focus on and what else will be important in energy policy in 2023.
Also in our News: The EU Commission wants to prevent bottlenecks in the supply of medical devices and has therefore proposed to extend the transitional periods for the Medical Devices Regulation. Turkey continues to stand in the way of Sweden and Finland joining NATO. And the renewed failure to form a government in Bulgaria could jeopardize the country’s plans to join the eurozone next year.
In his New Year’s Eve speech, Emmanuel Macron set the mood for 2023 as the “year of pension reform“. The long-planned reform is to be presented tomorrow, Tuesday. This date has been postponed several times, most recently in December because of the soccer World Cup: The president did not want to spoil the soccer enthusiasm. After all, the pension reform feared by many French people is an explosive topic.
Experts do not rule out unrest like the Yellow Vests in 2018. The pension reform could aggravate the already existing anger of the French over inflation and rising energy prices. Frédéric Dabi, director of the Ifop polling institute, sees strong support for a social protest movement and warned of an “intense conflict situation in the country.”
The government has been negotiating with the unions for days, without the slightest agreement. In the meantime, the unions are planning strikes and demonstrations. Jean-Luc Mélenchon, head of the left-wing party LFI (La France Insoumise), announced, “It’s going to be a hot January.” Philippe Martinez, head of the leftist CGT union, said, “We are all united to make sure this law will not be passed.” That was a major achievement, he noted with irony. After all, he said, unions had not stood together in the fight against reform for twelve years.
The government even failed to get the moderate CFDT union, the largest French trade union confederation, on its side. The unions are opposed to raising the age and the pay-in period. Instead, they want to increase levies on companies. Macron rejects this, because these levies are high in France anyway and dampen competitiveness.
Various polls showed that up to 75 percent of the French reject the reform. The united unions are also joined by opposition from left-wing parties and Marine Le Pen’s far-right Rassemblement National.
On Saturday, the Yellow Vests had called for protests across the country via Facebook, but so far without much success. Just under 5,000 people took to the streets in France, including around 2,000 in Paris, according to the Interior Ministry, to protest against pension reform and the government’s measures to fight inflation. The organizers estimated the number to be higher, but did not give any figures.
Much is at stake for Macron. After being elected for the second time in 2022 and shortly after winning only a slim majority in parliament, he must prove that he still holds the reins and can push through his plans.
The idea is to gradually raise the official retirement age to 64 or 65 or to extend the pay-in period. Currently, the retirement age is 62. Those who have not paid in long enough will not receive their full pension until they are 67. The reform is to apply to everyone born after 1961, and the retirement age is to rise by four months for each cohort. This could even affect French people who are about to retire.
Macron sends Prime Minister Élisabeth Borne ahead on Tuesday to present details. Debate is to start in parliament in the spring, and the reform is to be implemented by the summer. Borne tried to soothe the mood beforehand. She said that 65 years is not set in stone. The unions, therefore, expect an increase to 64 and an extension of the pay-in period – a move that would show the government’s willingness to negotiate.
The pension reform was already Macron’s prestige project during his first term in office. In 2019, he already wanted to merge the more than forty existing pension systems for the various professions into one system. The protests lasted almost two months, then the pandemic began and Macron postponed his project. Merging the systems is off the table for the new attempt, but criticism of reform remains.
It will also be difficult to achieve a majority for the reform in parliament. Macron depends on votes from the conservative Republicans because his party no longer holds an absolute majority in the National Assembly. The Republicans announced a similar reform in the presidential election campaign and have been advocating it for years. Under conservative President Nicolas Sarkozy, the official retirement age was already raised from 60 to 62 in 2010.
But now the conservatives are calling Macron’s plans too radical. If he fails to win a majority, the government can use the exceptional paragraph 49.3 of the constitution to force the reform through without a vote. He has resorted to this measure several times recently. The paragraph has also found frequent use in France in the past, but critics believe that this leaves democracy by the wayside. Sarkozy, for example, called invoking it a “sign of weakness” and believes it only incites protests and violence in the streets.
The Swedish presidency wants to solve the EU’s competitiveness also by becoming more energy independent. “It’s not just about becoming independent from Russia, but also from other countries,” Energy Minister Ebba Busch said at the council on Dec. 13. The leader of Sweden’s Christian Democrats and deputy prime minister, whose minority government is tolerated by climate change deniers, will become the face of European energy policy in the coming months.
However, the situation on the markets is now more relaxed than it was just a few months ago. By the end of the year, the price for natural gas will even be well below the €100 that even the most stubborn advocates of the infamous gas price cap wanted to push through. This should allow more time in the first half of the year for negotiating the Green Deal, finalizing the new expansion target for renewables, and focusing on the last major crisis issue: the electricity market reform.
The Commission’s proposal for reform of the electricity market has been announced for March – “to be confirmed”. This time, legislation could drag on even longer than on the gas price cap; the Commission wants to involve the Parliament and no longer invoke emergency Article 122. An initial non-paper on electricity market reform from the Directorate General for Energy outlined a four-part strategy:
The accelerated expansion of renewables is one of the three priorities for Commission President Ursula von der Leyen in 2023. In a Politico poll, it was striking how many commissioners named green energy technologies as the “next scarce commodity” after gas.
This year will determine how the most recently adopted planning acceleration tools are implemented. Today, the Commission kicks off with a high-profile investors dialogue, which is intended to set a good mood in light of the US Inflation Reduction Act (IRA). When it comes to electricity market reform, the EU will have to take care not to fall behind the US, warned Eurelectric Secretary General Kristian Ruby in an interview with Europe.Table.
The mood of optimism is not quite matched by the fact that the Council was once again petty about the renewables target for 2030 at the end of the year. The Commission and Parliament want to increase the target from 32 to 45 percent, while the member states only want to increase it to 40 percent. In the trilogue on the Renewable Energy Directive (RED), some will therefore have to show whether they support a rapid coal phase-out.
To ensure that investments in green technologies do not flow to the USA, there is political pressure to provide additional aid – such as additional funding for REPowerEU and a renewed extension of the Temporary Crisis Framework (TCF), which has been announced for Feb. 1. On the aid framework, the Commission already consulted member states in December. A survey published by Contexte, for example, raised the issue of whether the aid schemes should be extended to marine energy, hydropower, biomass and methane from landfills and wastewater treatment plants. The Commission even questions the need for tenders and is also considering facilitating aid to the industry.
The ingenuity of the member states for new subsidies is likely to be great. According to a report in the German business newspaper Handelsblatt, the German government explores the option of an industrial electricity price. The government would act as a market maker, matching electricity supply with demand from industry and bearing the default risks.
The regular council of energy ministers will not take place before June 19 in Luxembourg. However, an informal meeting will be held in Stockholm on Feb. 21 and 22.
The fall and winter have been mild so far, but next winter could be decisive, according to the International Energy Agency (IEA). For this reason, joint purchasing of natural gas is to function until the summer to ensure that the EU can fill its storage facilities in a coordinated manner and that price peaks like those in 2022 will no longer occur.
The emergency regulations are due to expire at the end of the year. If not extended, some elements could be included in the internal gas market package. However, the Council and Parliament have not even defined their positions for the trilogue. On Dec. 12, the Council at least published a progress report.
For hydrogen and e-fuels, the Commission’s delegated acts, which are crucial for the ramp-up, are still pending. They may be available by May 17, when the Commission plans to present its legislative proposal for the European Hydrogen Bank. It wants to invest an initial three billion euros in market making, and the German H2Global mechanism could serve as a model.
In addition to the gas market package already mentioned, the Council Presidency will also push ahead with several directives and regulations. The most advanced are:
Under the Czech Council Presidency, general orientations were reached on two other energy dossiers:
There is still no general orientation on the Energy Taxation Directive. Among other things, it sets minimum tax rates and thus plays a role in the market success of technologies. It is being negotiated in the Economic and Financial Affairs Council (Ecofin).
A few weeks ago, his latest book “Wir und die Flüchtlinge” (We and the Refugees) was published. A few hours before this interview, he was sitting in a conference at the Federal Ministry of the Interior to win over German politicians to his ideas. And two days later, he was scheduled to leave for a trip to Sweden, the country that took over the EU presidency on Jan. 1. Gerald Knaus’ life currently revolves around the question of how world political events affect migration processes. As co-founder and chair of the think tank European Stability Initiative (ESI), he tries to convince governments of solutions, including migration and flight.
Currently, the 52-year-old campaigns, for example, for his idea of a thank-you payment of 500 euros for families who accommodate Ukrainians in their homes despite the increased energy costs. “It depends on the commitment of civil society whether we will succeed this winter in accommodating the already historically high numbers of refugees,” says Knaus. He hopes that this relief payout in Germany will come before Christmas – and that other European countries will follow suit.
The migration researcher also supports a rapid EU accession prospect for Ukraine: “The negotiations must not end up like in the Balkans, where countries like Montenegro have not come any closer to accession for the past ten years”. His concrete proposal for a first interim goal: The European Union should hold out the prospect of Ukraine joining the common European single market within the next six months, provided the country meets the conditions for doing so. That would be a concrete, achievable and realistic goal.
Gerald Knaus studied philosophy, politics and international relations in Oxford, Brussels and Bologna. And he has had considerable success with his ideas in the past: The so-called refugee deal between the EU and Turkey of March 2016, for example, was first proposed by him in September 2015. His book “Which Borders Do We Need?” was a bestseller.
Born in Austria, Knaar has three grown-up daughters, lives in Berlin and regularly travels to the countries he talks about. In the Balkans, he worked for NGOs for many years and experienced wars, sometimes firsthand. “Making wars in Europe unthinkable was the main motivation for my colleagues and me when we founded the ESI think tank,” he says.
He knows what hyperinflation can mean for society from his one-year experience as a guest lecturer in the Ukrainian border city of Chernivtsi. Back then, in the early 1990s, the country was in a very different situation than it is today; he had to live on his savings. The money he received from the university was worth nothing after just a few days. As in big politics, he found concrete solutions in his private life – and invested in chocolate bars imported from the West, he says with a wink: “When I prepared my lectures late at night, they helped me stay awake.” Janna Degener-Storr
For years, Emmanuel Macron has wanted to reform the French pension system, plans that have been accompanied by strong protests from the very beginning. Not only do the opposition and all unions reject Macron’s plans, but according to polls almost 75 percent of the population does as well. Tomorrow, Prime Minister Élisabeth Borne is to present the reform. Among other things, the retirement age is to be raised to 64 or 65. This could trigger unrest similar to the Yellow Vests protests in 2018. Tanja Kuchenbecker reports from Paris.
In 2022, all energy policy revolved around gas. And this year? The electricity market will now come more to the fore, writes Manuel Berkel. However, there will probably continue to be updates on gas storage levels. Read our outlook to find out what the Swedish presidency intends to focus on and what else will be important in energy policy in 2023.
Also in our News: The EU Commission wants to prevent bottlenecks in the supply of medical devices and has therefore proposed to extend the transitional periods for the Medical Devices Regulation. Turkey continues to stand in the way of Sweden and Finland joining NATO. And the renewed failure to form a government in Bulgaria could jeopardize the country’s plans to join the eurozone next year.
In his New Year’s Eve speech, Emmanuel Macron set the mood for 2023 as the “year of pension reform“. The long-planned reform is to be presented tomorrow, Tuesday. This date has been postponed several times, most recently in December because of the soccer World Cup: The president did not want to spoil the soccer enthusiasm. After all, the pension reform feared by many French people is an explosive topic.
Experts do not rule out unrest like the Yellow Vests in 2018. The pension reform could aggravate the already existing anger of the French over inflation and rising energy prices. Frédéric Dabi, director of the Ifop polling institute, sees strong support for a social protest movement and warned of an “intense conflict situation in the country.”
The government has been negotiating with the unions for days, without the slightest agreement. In the meantime, the unions are planning strikes and demonstrations. Jean-Luc Mélenchon, head of the left-wing party LFI (La France Insoumise), announced, “It’s going to be a hot January.” Philippe Martinez, head of the leftist CGT union, said, “We are all united to make sure this law will not be passed.” That was a major achievement, he noted with irony. After all, he said, unions had not stood together in the fight against reform for twelve years.
The government even failed to get the moderate CFDT union, the largest French trade union confederation, on its side. The unions are opposed to raising the age and the pay-in period. Instead, they want to increase levies on companies. Macron rejects this, because these levies are high in France anyway and dampen competitiveness.
Various polls showed that up to 75 percent of the French reject the reform. The united unions are also joined by opposition from left-wing parties and Marine Le Pen’s far-right Rassemblement National.
On Saturday, the Yellow Vests had called for protests across the country via Facebook, but so far without much success. Just under 5,000 people took to the streets in France, including around 2,000 in Paris, according to the Interior Ministry, to protest against pension reform and the government’s measures to fight inflation. The organizers estimated the number to be higher, but did not give any figures.
Much is at stake for Macron. After being elected for the second time in 2022 and shortly after winning only a slim majority in parliament, he must prove that he still holds the reins and can push through his plans.
The idea is to gradually raise the official retirement age to 64 or 65 or to extend the pay-in period. Currently, the retirement age is 62. Those who have not paid in long enough will not receive their full pension until they are 67. The reform is to apply to everyone born after 1961, and the retirement age is to rise by four months for each cohort. This could even affect French people who are about to retire.
Macron sends Prime Minister Élisabeth Borne ahead on Tuesday to present details. Debate is to start in parliament in the spring, and the reform is to be implemented by the summer. Borne tried to soothe the mood beforehand. She said that 65 years is not set in stone. The unions, therefore, expect an increase to 64 and an extension of the pay-in period – a move that would show the government’s willingness to negotiate.
The pension reform was already Macron’s prestige project during his first term in office. In 2019, he already wanted to merge the more than forty existing pension systems for the various professions into one system. The protests lasted almost two months, then the pandemic began and Macron postponed his project. Merging the systems is off the table for the new attempt, but criticism of reform remains.
It will also be difficult to achieve a majority for the reform in parliament. Macron depends on votes from the conservative Republicans because his party no longer holds an absolute majority in the National Assembly. The Republicans announced a similar reform in the presidential election campaign and have been advocating it for years. Under conservative President Nicolas Sarkozy, the official retirement age was already raised from 60 to 62 in 2010.
But now the conservatives are calling Macron’s plans too radical. If he fails to win a majority, the government can use the exceptional paragraph 49.3 of the constitution to force the reform through without a vote. He has resorted to this measure several times recently. The paragraph has also found frequent use in France in the past, but critics believe that this leaves democracy by the wayside. Sarkozy, for example, called invoking it a “sign of weakness” and believes it only incites protests and violence in the streets.
The Swedish presidency wants to solve the EU’s competitiveness also by becoming more energy independent. “It’s not just about becoming independent from Russia, but also from other countries,” Energy Minister Ebba Busch said at the council on Dec. 13. The leader of Sweden’s Christian Democrats and deputy prime minister, whose minority government is tolerated by climate change deniers, will become the face of European energy policy in the coming months.
However, the situation on the markets is now more relaxed than it was just a few months ago. By the end of the year, the price for natural gas will even be well below the €100 that even the most stubborn advocates of the infamous gas price cap wanted to push through. This should allow more time in the first half of the year for negotiating the Green Deal, finalizing the new expansion target for renewables, and focusing on the last major crisis issue: the electricity market reform.
The Commission’s proposal for reform of the electricity market has been announced for March – “to be confirmed”. This time, legislation could drag on even longer than on the gas price cap; the Commission wants to involve the Parliament and no longer invoke emergency Article 122. An initial non-paper on electricity market reform from the Directorate General for Energy outlined a four-part strategy:
The accelerated expansion of renewables is one of the three priorities for Commission President Ursula von der Leyen in 2023. In a Politico poll, it was striking how many commissioners named green energy technologies as the “next scarce commodity” after gas.
This year will determine how the most recently adopted planning acceleration tools are implemented. Today, the Commission kicks off with a high-profile investors dialogue, which is intended to set a good mood in light of the US Inflation Reduction Act (IRA). When it comes to electricity market reform, the EU will have to take care not to fall behind the US, warned Eurelectric Secretary General Kristian Ruby in an interview with Europe.Table.
The mood of optimism is not quite matched by the fact that the Council was once again petty about the renewables target for 2030 at the end of the year. The Commission and Parliament want to increase the target from 32 to 45 percent, while the member states only want to increase it to 40 percent. In the trilogue on the Renewable Energy Directive (RED), some will therefore have to show whether they support a rapid coal phase-out.
To ensure that investments in green technologies do not flow to the USA, there is political pressure to provide additional aid – such as additional funding for REPowerEU and a renewed extension of the Temporary Crisis Framework (TCF), which has been announced for Feb. 1. On the aid framework, the Commission already consulted member states in December. A survey published by Contexte, for example, raised the issue of whether the aid schemes should be extended to marine energy, hydropower, biomass and methane from landfills and wastewater treatment plants. The Commission even questions the need for tenders and is also considering facilitating aid to the industry.
The ingenuity of the member states for new subsidies is likely to be great. According to a report in the German business newspaper Handelsblatt, the German government explores the option of an industrial electricity price. The government would act as a market maker, matching electricity supply with demand from industry and bearing the default risks.
The regular council of energy ministers will not take place before June 19 in Luxembourg. However, an informal meeting will be held in Stockholm on Feb. 21 and 22.
The fall and winter have been mild so far, but next winter could be decisive, according to the International Energy Agency (IEA). For this reason, joint purchasing of natural gas is to function until the summer to ensure that the EU can fill its storage facilities in a coordinated manner and that price peaks like those in 2022 will no longer occur.
The emergency regulations are due to expire at the end of the year. If not extended, some elements could be included in the internal gas market package. However, the Council and Parliament have not even defined their positions for the trilogue. On Dec. 12, the Council at least published a progress report.
For hydrogen and e-fuels, the Commission’s delegated acts, which are crucial for the ramp-up, are still pending. They may be available by May 17, when the Commission plans to present its legislative proposal for the European Hydrogen Bank. It wants to invest an initial three billion euros in market making, and the German H2Global mechanism could serve as a model.
In addition to the gas market package already mentioned, the Council Presidency will also push ahead with several directives and regulations. The most advanced are:
Under the Czech Council Presidency, general orientations were reached on two other energy dossiers:
There is still no general orientation on the Energy Taxation Directive. Among other things, it sets minimum tax rates and thus plays a role in the market success of technologies. It is being negotiated in the Economic and Financial Affairs Council (Ecofin).
A few weeks ago, his latest book “Wir und die Flüchtlinge” (We and the Refugees) was published. A few hours before this interview, he was sitting in a conference at the Federal Ministry of the Interior to win over German politicians to his ideas. And two days later, he was scheduled to leave for a trip to Sweden, the country that took over the EU presidency on Jan. 1. Gerald Knaus’ life currently revolves around the question of how world political events affect migration processes. As co-founder and chair of the think tank European Stability Initiative (ESI), he tries to convince governments of solutions, including migration and flight.
Currently, the 52-year-old campaigns, for example, for his idea of a thank-you payment of 500 euros for families who accommodate Ukrainians in their homes despite the increased energy costs. “It depends on the commitment of civil society whether we will succeed this winter in accommodating the already historically high numbers of refugees,” says Knaus. He hopes that this relief payout in Germany will come before Christmas – and that other European countries will follow suit.
The migration researcher also supports a rapid EU accession prospect for Ukraine: “The negotiations must not end up like in the Balkans, where countries like Montenegro have not come any closer to accession for the past ten years”. His concrete proposal for a first interim goal: The European Union should hold out the prospect of Ukraine joining the common European single market within the next six months, provided the country meets the conditions for doing so. That would be a concrete, achievable and realistic goal.
Gerald Knaus studied philosophy, politics and international relations in Oxford, Brussels and Bologna. And he has had considerable success with his ideas in the past: The so-called refugee deal between the EU and Turkey of March 2016, for example, was first proposed by him in September 2015. His book “Which Borders Do We Need?” was a bestseller.
Born in Austria, Knaar has three grown-up daughters, lives in Berlin and regularly travels to the countries he talks about. In the Balkans, he worked for NGOs for many years and experienced wars, sometimes firsthand. “Making wars in Europe unthinkable was the main motivation for my colleagues and me when we founded the ESI think tank,” he says.
He knows what hyperinflation can mean for society from his one-year experience as a guest lecturer in the Ukrainian border city of Chernivtsi. Back then, in the early 1990s, the country was in a very different situation than it is today; he had to live on his savings. The money he received from the university was worth nothing after just a few days. As in big politics, he found concrete solutions in his private life – and invested in chocolate bars imported from the West, he says with a wink: “When I prepared my lectures late at night, they helped me stay awake.” Janna Degener-Storr
