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France’s pension reform cannot go ahead as planned – Macron

French President Emmanuel Macron’s planned reform of the pension system cannot go ahead as planned in the wake of the pandemic crisis. Retreating on one of the signature reforms he promised to push through when he came to office.

Macron said to the reporters that he does not think that the reform as it was originally envisaged can go ahead as such. It was very ambitious and extremely complex. And that is why it generated anxiety, which they must admit that. Doing it right now would mean ignoring the fact that there are already a lot of worries, said the president.

Before the former investment banker’s election in 2017, one of Macron’s key campaign promises was the reform of France’s costly and complex pension system. In spring 2022, the new presidential elections are coming up. And so, Macron had to decide whether to risk pushing ahead with the polarising reform, or make a bid for re-election with a new plan. When the details of the reform were unveiled, it prompted a wave of strikes and protests from trade unions. As a result of this the Paris public transport network came to a virtual halt for weeks together.

Macron put all his centrist government’s reform plan on hold, in March 2020 at the start of the pandemic. This includes the pension reform. The government said that talks with unions about pension reform would be postponed until 2021, because of the pandemic situation that prevailed in 2020, as they need to focus on economic recovery. Deferring the reform until after the 2022 presidential elections might defuse union and voter concerns. But also, it risks undermining Macron’s credibility as an economic reformer.

Raising the retirement age by two years to 64, replacing dozens of sector-specific regimes with a universal, points-based system and doing away with legacy regimes in the state railways, utilities and other industries where some workers are entitled to retire on a full pension years before the average retirement age of 62, were all included in this reform plan.

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Finance

Euro zone ministers expect inflation to slow in 2022

The acceleration of euro zone inflation, driven energy prices, is mostly temporary. Then the price growth will slow down again. The euro zone finance ministers agreed that, that too the next year as forecasted by the European Central Bank and the European Commission.

Paschal Donohoe, chaired the talks of the ministers in Luxembourg. In a news conference he said that there was also agreement that the inflation spike was not an argument against the transition to renewable sources of energy. This is under the EU’s ambitious plan of reducing CO2 emissions to zero by the year 2050.

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Finance

Under new rules, borrowing for investment sensible

British finance minister Rishi Sunak said that the government borrowing to fund investment was a sensible thing. This is to allow under new fiscal rules that he is likely to announce, unlike borrowing for day-to-day spending. He said that borrowing for capital investment that is going to drive up their growth is probably a sensible thing for them. And that too particularly in an environment of slightly lower interest rate. Sunak stated this in an event on the sidelines of the annual conference of Britain’s ruling Conservative Party. This event was organized by the Taxpayers’ Alliance advocacy group. Sunak stated in that event, that borrowing for more day-to-day spending is probably less something that you would want to have as part of your framework.

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Finance

IMF board to interview Georgieva-sources

The International Monetary Fund’s executive board is going to interview Managing Director Kristalina Georgieva. This is regarding that; its reviews claims that she pressured World Bank staff to alter data to favor China in her previous role. Board members were initially expected to meet with Georgieva. But spent their time working on other regular business matters.

The board members spent hours for questioning lawyers from the WilmerHale firm. This is about their World Bank investigation report which alleged that Georgieva, as the bank‘s CEO applied undue pressure on staff, to alter data in the flagship “Doing Business” report to benefit China. Then, an IMF spokesperson said that the IMF board remains committed to a thorough, objective, and timely review of the matter. Georgieva has strongly denied the accusations.

The upcoming interviews could prove pivotal in either increasing support for Georgieva. This is with many IMF shareholders are keen to wrap up the board’s deliberations on the matter. The fund’s most influential member governments, including the top shareholder the United States, have withheld public judgment. The World Bank tasked WilmerHale with investigating the “Doing Business” data irregularities identified in 2020. The law firm’s report contends Georgieva. The former World Bank President Jim Yong Kim’s office pressured staff to manipulate data so that the China’s global ranking in the “Doing Business 2018” study of investment climates rose to 78th from 85th.

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