INSPIRED by the wartime programme of the National Resistance Council, the French welfare state was designed to “free workers from the uncertainty of tomorrow” by giving them publicly financed insurance against illness, joblessness, maternity, invalidity and old age. Over the past 60 years, France’s vast social-security system has nearly tripled in size. Public social spending now accounts for 32% of GDP, more than in any other member of the OECD club of rich countries (see chart).

For the Socialist Party, now in power under President François Hollande, changes to the welfare state have been all about social “progress”. François Mitterrand cut the retirement age from 65 to 60. Lionel Jospin, a former prime minister, brought in universal top-up health coverage for the poor. Previous reforms that, on the contrary, tightened pension or welfare rules were done by the political right. Now, thanks to stretched public finances and recession, Mr Hollande will have to square the urgent need for welfare savings with his promise that “each generation will live better than the previous one”.

Three issues are on Mr Hollande’s list: pensions, family benefits and unemployment payments. Funds for all three are in the red. The deficit of the pension branch of the social-security system will swell from €15 billion ($20 billion) to €20.9 billion by 2020. The deficit for family benefits will reach €2.6 billion this year; for unemployment pay, it will be €4.8 billion.

So far the government has put off hard spending choices, relying instead on tax increases for most of its fiscal consolidation. But time is running out. The government has already postponed by two years its promise to reduce the budget deficit to 3%. In return, to Mr Hollande’s open irritation, the European Commission has told France firmly that it is “crucial” to bring public spending under control, and that “new policy measures are urgently needed” to deal with the pension deficit.

France’s looming pension problem will be most acute over the next 20 years, as the baby-boomers born in the 1950s and 1960s retire, as a government-commissioned report into pensions published on June 14th pointed out. This will throw the pay-as-you-go pension scheme off balance, as the ratio of those of working age to those over 60 shrinks from 2.6 to 1.5. France’s high birth rate means that, unlike Germany, the pressure will ease after that. For the time being, though, the system is bleeding cash.

The simplest answer would be to uncouple pensions from inflation in future. But Mr Hollande has in effect ruled this out, declaring that he will “guarantee” current benefits. Despite a rising retirement age in the rest of Europe, he also refuses to raise the minimum retirement age, currently 62, on the ground that it has already been increased from 60 by his predecessor, Nicolas Sarkozy. Many on the left, which fiercely contested the Sarkozy reform, regret the end of a cherished acquis, or right. Even now, the communist-backed Confédération Générale du Travail, the biggest union, is pushing for a return to retirement at 60 and promising protests in the streets this autumn. On the campaign trail last year, Mr Hollande made only one specific pension pledge: to lower the pension age to 60 for those who start work young.

This leaves two options: increasing charges on employers and workers and taxes paid by pensioners on their benefits; or raising the contribution period needed to qualify for a full pension. Hitting the better-off with higher taxes is a policy favourite of Mr Hollande’s. And trimming a family tax-credit for richer households is how he is proposing to close the family-benefits deficit. But this option spooks Brussels. Olli Rehn, the economics commissioner, has said that such measures would squeeze the competitiveness of French firms. The prospect of yet more taxes is “unacceptable” and “irresponsible”, says Laurence Parisot, outgoing head of Medef, the employers’ federation.

As for lengthening the pension-contribution period, Mr Hollande is sending out contradictory messages. He has warned the French that they will “have to work a bit longer”, owing to rising life expectancy, but he has also ruled out raising the retirement age. In the pensions report, one option is to raise the contribution period for those born in 1966 from 41.5 years to 44. This would make a mockery of the legal retirement age, since it would require some workers to continue beyond it in order to qualify for a full pension. Force Ouvrière, a union close to the Socialist Party, has called this idea “crushing”.

Weeks of talks between unions and employers are now starting. If a compromise can be reached by September, Mr Hollande wants to pass a new pension law in the autumn, when fresh talks will begin on unemployment benefits. The merit of his consensus approach is that it avoids confrontation. A new labour law passed in the spring followed the same method and did not provoke mass protests. But the downside is that all steps forward (such as progress on liberalising working hours and wages in the labour law) have to be balanced by concessions (firms must now make new compulsory top-up health insurance payments), so the overall result tends to be a soft fudge.

Were the unpopular Mr Hollande a more ambitious reformer, he would go much further and faster on pensions. He would not only raise the retirement age but harmonise the rules for private and public pensions, the source of a huge perceived grievance. Civil servants and special categories such as railway or electricity workers enjoy wildly beneficial rules. Paris metro and bus workers, for instance, may still retire at the age of 50, rising to 52 only in 2017. Yet a radical overhaul looks increasingly unlikely. To do it would touch the backbone of Mr Hollande’s public-sector electorate, particularly the nearly 1m teachers. The consensus-seeking president, says somebody close to him, would “prefer to advance at his rhythm, than to fail by going too fast.”