There will ultimately be no agreement on pensions. The conclave convened by Prime Minister François Bayrou to improve the reforms implemented by the Borne government has failed. Employers’ and employees’ unions have not reached a satisfactory agreement.

The first observation is the failure of French-style joint management. The social model was forged, over the years, through marathon negotiations that resulted in an agreement at the end of the night. This period is over because the conditions for growth have deteriorated significantly in France.
Negotiations and agreement can be reached after a tense night when the required efforts are limited. In the past, this reflected growth and productivity conditions that could cushion a restrictive framework. Today, room for maneuver is reduced everywhere. Growth since the pandemic has not picked up. Expectations are for 0.6% this year, which is mediocre.
When the resources to be shared aren’t moving forward, negotiation becomes a zero-sum game. One side wins and one side loses. At the conclave, none of the partners around the table wanted to end up with the mistigri and lose the game.

We are now entering a form of power struggle and a breakdown in the form of social negotiations. The elusive growth has brought down the historical model.
As long as the French economy does not regain the margins resulting from stronger growth over time, its social model will be disrupted.
This illustrates the difficulty of an economy without growth. The shares of the pie will be divided up according to the evolution of the balance of power within the economy.

A real question regarding the social game arises: Who will still be willing to respect the current rules now?
Society only functions coherently when everyone plays by the same rules. This has been achieved until now through joint management. The rules are likely to change if we enter into a zero-sum game.
From then on, the actors will always play according to consistent rules.

The question is all the more important given that demographics are also disrupting social relations. To illustrate this phenomenon, let’s take INSEE’s demographic projections. Before 2030, the number of people over 65 will exceed the number of people under 20. Will the latter have any interest in playing the social game still in play? Not at all certain. The centralized system risks being overwhelmed by its youth, who will not want to work for nothing. This will be another power struggle that will also strain social relations.
The French social model was built on the idea of ​​solid, long-term growth. The lack of growth in overall income has suddenly led to the need to reinvent social and institutional relations.

France is entering a troubled period.