France’s Retirement Reform: Too Little, Too Late?

But the plan still leaves Alitalia dependent on finding at least 125 million euros from its shareholders, who have 30 days to decide whether to sign up. That gives Air France considerable leverage. The Franco-Dutch carrier was barred from a full takeover of Alitalia in late 2008 by then prime minister Silvio Berlusconi. Alitalia has lost 700,000 euros a day in the intervening period and Italy’s current government and Alitalia’s shareholders are now hoping to persuade Air France to up its stake – though there is still considerable political discomfort about any merger. So far all parties have failed to agree financial commitments and business strategy. Alitalia wants to reposition itself in the higher-margin long-haul market after losing out in regional and domestic routes to competition from low-cost carriers and high-speed trains. That plan appears to clash with Air France’s demands for a much tougher restructuring and debt-cutting measures. Analysts have said the logical way to save the Italian carrier would be for Air France-KLM to take over the operating core of the airline and get rid of the entire Alitalia back-office structure, but that would mean severe cost cuts and job losses, which Rome and unions are likely to oppose bitterly. If Air France-KLM does not participate in the share issue, it could be overtaken by the Italian post office as Alitalia’s top shareholder and its own stake could drop to below 15 percent. This would effectively cost the company its veto power on any new shareholders coming in. And if Alitalia were to fail, Air France-KLM would lose access to Europe’s fourth-largest travel market. But with Air France in the middle of a tough restructuring itself, that decision will be a close call. “Without Air France-KLM, there is even less of a future for Alitalia,” said Andrea Giuricin, a transport analyst at Milan’s Biccoca university. “If Air France-KLM does not put in the money, I want to see which Italian shareholders fill the gap.” The support of Alitalia’s domestic investors for the capital increase is also in the balance.

Air France-KLM “50:50” on Alitalia cap hike – source

Sent! A link has been sent to your friend’s email address. 7 To find out more about Facebook commenting please read the Conversation Guidelines and FAQs France’s retirement reform: Too little, too late? USATODAY 3:22 p.m. EDT October 14, 2013 French President Francois Hollande French President Hollande managed to changed the pension system by working with unions Still, they plan protests Tuesday And critics says he succeeded by making small changes that won’t achieve what’s necessary SHARE 10 CONNECT 26 TWEET 7 COMMENTEMAILMORE PARIS (AP) President Francois Hollande has managed to do what was once thought impossible: Make changes to France’s cherished and generous retirement system with little resistance from unions. His secret? The changes are so small and put off so far into the future that economists say they aren’t worthy of the name “reform.” Labor unions were calling for protests across France on Tuesday. But the demonstrations are not expected to turn into the massive protests that brought cities to a standstill in 2010, when Hollande’s predecessor, Nicolas Sarkozy, raised the retirement age. Partially that is because Hollande, a Socialist, consulted with union leaders when drawing up the reform. Also, the changes, which the lower house of parliament votes on this week, will fix only a part of what needs changing, analysts say. “It’s the salami strategy,” said Elie Cohen, an economist at Sciences Po university. “We have a big problem, we don’t know how to fix it, so we cut it into pieces, like a nice sausage.” Hollande’s reform would lengthen the number of years people must work to receive a full pension, from 41 years today to 43 years by 2035.

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