FORTUNE — Though François Hollande has just unpacked his bags in the presidential palace since being voted into office, he might want to start planning for his life after. At 57, he is just shy of the retirement age he promised to implement. Generous public pensions have long been a French right, and you can retire at 60 if you’ve worked for at least 41 years. When Nicolas Sarkozy raised that to 62, protesters stormed the streets. Now Hollande is rolling it back. Warns one former Sarkozy aide: “We don’t have the euros to pay for all this.” That much is clear. There are near-zero growth and double-digit joblessness. France’s public debt is a staggering 85.8% of GDP. And thanks to superb public health care, French people live longer than any of their European neighbors. So how to fund quarter-century-long retirements? “We have absolutely no idea,” says Paris economist Marc Touati. “It is a French dream.”
This story is from the July 23, 2012 issue of Fortune.
