Two major issues are at the heart of the political debate in France: purchasing power and pensions. The economic and political tensions for two years have generated a sharp increase of the fossil fuels prices, sending us forty years back at the time of the two oil shocks. The sanitary crisis has perturbated industrial products and spare pieces supply chains and the situation has been made worse with its rebound in China, which, there too, has generated pressures on prices. The invasion of Ukraine by Russia has, at last, created major uncertainties  regarding the supply of cereals, which will weight on the prices of many foods. At the origin, this inflationist rebound had been considered as transitory. The persistency of the sanitary crisis and of geopolitical tensions lead to consider that the phenomenon will last at least some time and that it constitutes a threat on the purchasing power because salarymen remunerations and social benefits have not been reevaluated.

The pension issue is not new and has been present in the political debate for ten years without any agreement was found between successive governments and social partners since the legal age for retirement was fixed at 62 years. In a context of increased budgetary deficits due to the crisis, the issue of sustainability of the financing of pensions systems cannot be eluded. But as the purchasing power one demands to have measures with an immediate application, the pension one is inspired by the long-term protection of the distribution system. Compared to health insurance, which would overpass 20 billion in 2022, the deficit of the general pension system will be modest with 2.5 billion. But its long-term prospects are worrying with the increase of life-duration and the birthrate fall. In the future, there will be more and more retired persons and less and less contributors.

But these two challenges must not make us forget a quite also uncontestable reality, the continuous enrichment of the French people for more than twenty years. At the end of 2020, the last figure published by INSEE, their wealth was at 15 295 billion euro. The financial assets reached 6 200 billion. It increased and has continued to increase in 2021 and 2022 dur to a financial saving rate which surged from 6% in 2019 to more than 11% of the available gross revenue at the end of 2021. Real estate prices have increased by 150% in 20 years and more than one household on two owns his home. So the purchasing power issue is not risen on the same way for everyone. A retired couple, who own his home he has finished to reimburse the credit contracted to buy it and who don’t need to take his car to go to work is not at all in the same situation that a young family with children, being tenant and having low wages paid at the beginning of their carrier when, atop of that they have no other solution than accepting precarious jobs.

The action in favor of purchasing power must be targeted, focused on small pensions and low salaries. A general indexation, even if it is a temporary one, would not make any sense because its only effect would be to increase inequalities, which are now much more standing between generations because we must include assets, than just between revenues. It is also why it is essential to facilitate the transmissions from one generation to another through a reduction of the taxes on gifts, on the rates which are applied to and on the periodicities which allow to be exonerated of the taxes by the State.

A direct intervention on prices is much more complex to put into practice, with a limited efficiency and a frequently excessive cost. Regarding fossil fuels which are heavily taxed by the State, which so becomes, with the oil companies, the main recipient of the current increases, it would be again interesting to study the idea issued at the end of the Nineties by the Jospin government, of a floating VAT or tax. It would be possible that every three months, after having studied the price evolution, the State decides, up or down, to modify its tax rate in order to limit, in both directions, the consequences of the market fluctuations. This measure would also have, as an advantage, to not been presented as a subvention to buy gasoline at a time when the preservation of the environment demands that its utilization is reduced.

The action to take in order to guarantee the future of the distribution pensions systems must take into account two realities. The complementary regimes, the special ones and the state, with its Pensions Special Fund, have accumulated huge provisions, between 100 and 150 billion euro, which, when they are invested in the markets, generate revenues much superior to the current deficits. So it is quite unjustified to have an alarmist message because that will allow during many years to guarantee the benefits. The second reality regards the increase of life duration which is considered as a major risk. The true is different. At 62 years old, the new retired person benefits from his pension to which he has contributed, from the fruits of his savings he has accumulated and in many cases from his home whose he is the owner, and, what it is new, from his share of heritage he has just or he will receive soon from his parents.

To be efficient the fixation of a higher legal retirement age must take into account the state of the job market. The unemployment rate of people above 55 years is high. If this one doesn’t diminish, it will bring nothing to change the retirement age because that will only increase the charges of the unemployment insurance system or the benefits given to these who cannot anymore have access to their insurance. The modalities of the definition of the benefits, and notably the number of years necessary to have access to a full pension must also evolute to take into account the fact that for the young the access to a job is more and more late, due precisely to the high unemployment level these last years, even if it has started to fall.

So, the support of the purchasing power as the necessary reform of the pensions system must integrate these two major factors as the inequalities between generations and the huge saving accumulated by the French people. The young seem to have been abandoned by the economic policy. The choice, especially in the public sector which consists in poorly paying, despite they have the requested qualifications to be recruited, these who take their functions and to progressively increase their salaries when they become older, must be put into question because we need much more resources at 30 years than at 60 years. It is the same with the wealth transmission. The have become enough important to, instead of proposing to more taxing rich people, are accelerated and facilitated each time that make sense the transfer of their assets to their heirs.

The point that the young generations, in France, years after years, were less interested by politics to the point they don’t go to vote has not been questioned. One of the reasons, is surely that the improvement of their economic situation is not included in the programs of these who intend to govern the country. Time has come to remedy to it.