France's planned pension reform is getting a failing grade from critics who say the government is not going far enough to balance its pension system.

French administration officials unveiled the pension reform plan at the end of last month. The length of employee contributions will be increased incrementally by one trimester each year beginning in 2020 through 2035, according to an analysis by EurActiv. The contribution period would be extended from 41.5 years to 43 years over that timeframe. The report said a plan to raise a general income tax was scrapped due to pressure from trade unions. Under the proposal, employees and businesses also will face a 0.3 percent increase in contributions by 2017.

The French government says the plan would save €7.3 billion by 2020, and allow for a balanced budget by 2040, according to published reports. Both opposition parties have criticized the plan, either for harming employees and retirees or for not going far enough to get the country's policies in line with other nations and balance the budget.

The European Commission in May told France to reform the pension system and take other corrective measures to solve the country's budget woes. In France, workers can retire at 62, earlier than other member states. Among the suggestions for pension reform were raising the retirement age, altering indexation rules, and increasing the full-pension contribution period without raising employer contributions. The commission noted the pension system faces substantial deficits through 2020, signaling the need for measures to correct the situation.

The commission's guidance was made as part of its annual policy recommendations to member states. The recommendations are not legally binding, but member states potentially face warnings or sanctions if the recommendations are ignored. The commission allowed France an extension until 2015 to hit certain economic targets.

French leaders initially rebuffed the commission's recommendations, with French President Francois Hollande saying pointedly that the commission “cannot dictate what we should do,” according to comments published on the EurActiv news site.

European Commission officials had argued France's fiscal woes are hampering the ability of the country's private sector to compete.

HSBC Global Research was among those critical of the proposed reform. The firm said the changes would not solve structural issues with the pension system, especially given projected increases in inflation.

“The measures are disappointing. They will only address the deficit of the general pension scheme for private sector employees, not that of the overall pension system,” the research firm was quoted as saying by AFP. The system still will face “a deficit of 13.6 billion euros in 2020 according to the French pension council even if all the measures announced are applied.”

The country's largest employer group, Medef, also criticized the planned revisions. “This is a dangerous reform that is not acceptable to us,” Pierre Gattaz, head of Medef, told newspaper Le Figaro. “In reality, it is a non-reform. No structural problem is resolved.”

At least one union, CGT, has reportedly threatened strikes to coincide with the formal presentation of the reform plan to government ministers on Sept. 18. French parliament is expected to discuss the reforms next month.

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