France's Socialist government will overhaul the nation's pension system again because former president Nicolas Sarkozy failed to ensure its long-term viability, Labour Minister Michel Sapin told Reuters.
A government-endorsed panel of experts estimates the system that relies on people in work paying taxes to fund those in retirement will run up a deficit of 20 billion euros ($27 billion) by the end of the decade - despite a reform by Sarkozy that sparked large and widespread street protests in 2010.
"The main message is that the previous reform in no way solved the problem. It generated a lot of injustice without solving the problem itself," Sapin, a close friend of President Francois Hollande, said in an interview.
"A large chunk of 2013 is going to be devoted to this reform, to consultations on this reform, what shape it takes, how we go about it, and where it's headed," he said.
Acknowledging that such changes would still leave the system dependent on state support, he added: "It's about moving the cursors that can be moved to ensure that, even if the books are not balanced, the system is in any case sustainably financed."
But with state finances already under duress and a stagnant economy, the government has few options to fix the system given that it has always dismissed any element of private pension funding. Its options consist largely of increasing the length of time that people are obliged to contribute to the scheme or seeking further increases in minimum retirement ages.
Hollande, who unseated Sarkozy in a May election to become the country's first Socialist president in 17 years, has rolled back part of a reform under which his predecessor had raised the legal pensionable age to 62 from 60.
Read more of this report from Reuters.