FRANCE - France's plan to lift its retirement age is a signal to investors about the seriousness of President Nicolas Sarkozy's intention to cut the budget deficit, Finance Minister Christine Lagarde said.
"The priority is to protect the retirement system," Lagarde said today on France Inter radio. "We are also trying to send a message of security to the markets."
Sarkozy's government set out proposals last week to raise the minimum age at which workers can tap the state pension to 62 in 2018 from 60 currently. The age at which full benefits are reaped is to rise to 67 from 65 under the plan, which labor unions protested yesterday.
France is the only country among Europe's five biggest economies not to have presented a detailed savings plan for next year. Britain set out deficit-cutting measures totaling £113bn (US$167bn) earlier this week and Germany announced cuts of €81.6bn ($101bn) on June 7.
Sarkozy has committed to reducing the deficit from 8% of gross domestic product this year to 6 percent in 2011 and 3 percent in 2013.
Lagarde said "there's no reason to think" that France's AAA credit rating is threatened, though she said the country doesn't have the luxury of time to debate the pension overhaul.
"We have time pressure, it's not possible to delay," Lagarde said. "The public finance situation doesn't allow for it. We need to take measures quickly."
Sarkozy and Lagarde join leaders and finance ministers of the Group of Eight later today in Huntsville, Ontario, before meeting their Group of 20 counterparts tomorrow in Toronto.
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