Hollande’s first step is a faux pas

Politicians are often accused of reneging on their electoral promises as soon as they take office. So far, this has not been the case of France’s president, François Hollande. This week, barely a month after his election, Mr Hollande made good on his pledge to restore the right to retire at 60 – rather than at 62 – for some workers.

While widely expected, this is an unfortunate decision. True, the measure only applies to those who have contributed to a pension for 41 and a half years, more than in several other EU countries. But it represents a partial U-turn on one of France’s most significant recent structural reforms. The price tag – rising to €3bn a year by 2017 – will be financed by raising France’s already heavy cost of labour.

Mr Hollande’s alacrity on the pension counter-reform has a clear political justification. Over the next two weeks, France will be voting to elect its National Assembly and Mr Hollande is seeking to consolidate support among the more leftwing sections of the electorate.

But, besides doing no good to the French economy, Mr Hollande’s reform risks weakening France’s credibility on the European front. Facing a long-term demographic challenge, several eurozone countries have recently increased their pension age ever closer to the 70-year benchmark. By going back to 60 – if only for some workers – it will be harder for France to demand more sacrifices, or, indeed, more solidarity, from its partners.

The pension reform is also worrying from a domestic point of view. While Mr Hollande and his finance minister, Pierre Moscovici, have sent reassuring signals in terms of short-term fiscal discipline, there are bigger questions over how committed they are to structural reforms.

There are already signs that the executive is veering to the left. Michel Sapin, labour minister, reacted to the news that unemployment had reached 10 per cent by saying that he wanted to raise the cost of firing workers.

Mr Sapin’s statement may be yet another electioneering ploy. But there are worries that this could pave the way to less labour market flexibility for French businesses. And with a government committed to fiscal consolidation, it is hard to see who would then create the jobs and the growth the French president is so keen to pursue.

Mr Hollande’s slogans could well win him this month’s elections. But this should not be an excuse to backtrack on much-needed structural reforms. Not all that works on the campaign trail is necessarily good in government.