Reuters have a story that the French president may only make lightweight reforms to France’s indebted pension system.
Any attempts at major reforms are likely to be met with widespread protests from trade unions and revolt among his own socialist party.
The state pension fund has been eaten away by the rising unemployment and the funding gap is expected to balloon from the current €14bn to €20bn by 2020.
Hollande has already shelved plans to raise the retirement age from the reform bill due to be presented to parliament in September.
Aside from upsetting the trade unions with strong reforms his own party’s threat of rebellion could leave him on shaky ground as he only has a 3 seat parliamentary majority.
Hollande is also under fire form fellow Europeans who say that France risks damaging its standing and that of the eurozone, among investors and may upset southern state members who are struggling with harsh reforms, if it fails to tackle the pension deficit.
France has been out of the markets gaze for quite a while. Even the downgrade didn’t gain that much attention, but there are still massive problems simmering under the skin of the country.
Eurozone politicians are still sitting on their hands over major issues like these in the hope that everything will work itself out in the next few years. It’s another reason I don’t see Europe digging itself out of the mess it’s in for a long long time.