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French PM says to adjust savings plan, ease burden on pensioners

Published 24/04/2014, 13:04

PARIS (Reuters) - French Prime Minister Manuel Valls said on Thursday that he would adjust a 50 billion euro (41 billion pounds) savings plan to ease the burden on low-income pensioners, ceding to pressure from rebel lawmakers in his Socialist Party.

The Socialist government on Wednesday signed off on a multi-year fiscal programme that underscored its commitment to lower the public deficit to a European Union ceiling of 3 percent of gross domestic product by the end of next year.

The deficit-reduction plan, based on growth forecasts deemed "optimistic" by an independent public finances watchdog, will be sent to parliament for a vote on April 29 before it is submitted to the European Commission.

But the government is grappling with opposition from left-wing Socialists who criticise the plan, arguing that it should be adjusted to avoid a planned one-year freeze on welfare benefits and state pensions.

"We are asking people to make an effort by freezing a number of benefits until 2015, but we will make a strong gesture for low-income pensioners," Valls told reporters during a visit to a rubber factory near Paris.

Valls' Socialist Party suffered a rout in local elections last month as many of its working class supporters, frustrated by high unemployment and upcoming welfare cutbacks, deserted it in favour of the centre-right opposition UMP and far-right National Front party.

With the hardline Force Ouvriere union calling for a strike in the public sector on May 15 against plans to curb salary rises for all civil servants until 2017, Valls added that he would consider revising the freeze.

He said the government could consider undoing the wage freeze if growth was strong enough.

Earlier, Finance Minister Michel Sapin said the total amount of savings, which will curb state spending and freeze civil servant wages over the next three years, was not subject to negotiation and that the overall plan would remain intact.

(Reporting by Elizabeth Pineau; Writing by Nicholas Vinocur; Editing by James Regan/Jeremy Gaunt)

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