France's Aging Challenge: A Financial Wake-Up Call

France is bracing for significant demographic shifts that could strain its economy and public finances.

Aging Population

• By 2070, nearly one in three people will be over 65.
• The working-age population will decline by over 3 million.

Financial Strain

• Healthcare, pensions, and elderly care already account for over 40% of public spending.
• Public spending could reach levels not seen since the COVID-19 pandemic.

Declining Birth Rates

• France once had a higher birth rate than other European countries.
• Post-pandemic, the number of children per woman is falling, while retirees are rising.

Pension System at Risk

• The pension system relies on workers funding retirees' benefits.
• Fewer workers mean less income, while more retirees mean higher payouts.
• Experts call this the "scissor effect"—a major financial concern.

Possible Solutions

• Boosting employment among young people, seniors, and women could help.
• Immigration alone won't solve the problem; structural reforms are needed.

Political Challenges

• Last month, lawmakers suspended a pension reform that would raise the retirement age from 62 to 64.
• This delay could worsen the problem.
• Experts urge politicians to address the issue directly.