PARIS (Reuters) - President Francois Hollande sent to cabinet on Wednesday a reform of France's pension system which has prompted little street protest at home but which international critics say does not go far enough.
Hollande has chosen to adapt the current system by raising slightly the level and duration of pension contributions rather than increasing the statutory pension age from 62 years as the European Commission recommended.
The Brussels-based executive arm of the European Union wants France to commit to ambitious structural reforms in return for its decision this year to grant Paris a further two years to rein in its public deficit below three percent of output.
"The text rests on a careful financial balance, and we must make sure this balance is preserved," Social Affairs Minister Marisol Touraine, the official handling the reform, said of a bill due to enter parliament on October 7.
The reform, the most closely watched of Hollande's 15 months in office, aims to reduce a pension deficit expected to hit 20 billion euros ($26.5 billion) by 2020 if nothing is done.
It will raise contributions slightly for both companies and individuals while from 2020 lengthening working lives gradually to 44 years from 41.5 currently by 2035. Neither measure is likely to be blocked in the Socialist-controlled parliament.
But the reform falls short of more radical changes urged by the European Commission - notably an increase in the legal retirement age, currently of 62 years for a full pension, and must still be sold to French debt holders and European partners.
European Commissioner Olli Rehn pressed last week for assurances that the reform will not raise labor costs, a call echoed by ratings agency Standard & Poor's which said France must do more to boost competitiveness.
While the reform's key planks are assured safe passage through parliament, Touraine said far-left parties may seek amendments on finer points like a point-system to let people in strenuous jobs stop working early.
An increase in the contributions of civil servants will be introduced gradually
The government is pushing for a rapid debate in parliament because it has to be concluded before an amended welfare spending budget is passed in late October.
(Reporting By Emmanuel Jarry and Elizabeth Pineau; Writing by Nicholas Vinocur)