Francois Hollande looks to raid French pensions to cut costs

Even Socialists admit the pension system can be bloated.

France’s Socialist President Francois Hollande, facing pressure from the European Union to meet budget plans, is looking at the sacred pension cow to cut.

His core supporters won’t be happy, Bloomberg reports.

But the pension system recorded a deficit of $19 billion in 2011.

And the economy is about to enter its third recession in four years, with record-level unemployment.

In response, Mr. Holland is preparing “public opinion, rating agencies and markets for a drift in the deficit while at the same time conveying a sense that the country is taking steps to address its structural shortcomings,” said Gille Moec, an economist at Deutsche Bank in London, in the Bloomberg report.

More to the point, Mr. Moec continued in the report: “France is walking a tightrope.”

Mr. Hollande is considering a halt to the practice of tying pension increases with inflation, along with more substantial, as-yet unspecified, pension system overhauls, Bloomberg reports.

Predecessors who have attempted similarly were met by protesting crowds and union rallies, however.