Despite the controversy, the French President’s economic proposals are far from the ‘Anglo Saxon’ model. Barnaby Towns argues that, when it comes to addressing inequality, the UK could learn from them
As France’s hyperactive president, Emmanuel Macron moves his agenda forward, controversy follows him. France reeled from rioting in response to Macron’s pension reform, which incrementally raises the state retirement age from 62 to 64 by 2030, sparking such opposition that the French Republic’s eighth president controversially used the constitution’s Article 49:3 to change the law.
This contentious provision, used 87 times since 1958, requires a parliamentary vote of confidence in the government, which entails new parliamentary elections, to stop measures passed by presidential decree. The procedure can only be used once annually but has no limit on its use for government spending and tax legislation.
Yet the domestic outrage Macron sparked would be uncontroversial in many of France’s peer nations.
In the UK, the state pension age is 66–four years higher than in France–rising to 67 by 2028 and 68 thereafter. Germany’s legal retirement age also is 66, scheduled to rise to 68. Italy already sets its pension threshold at Macron’s 2030 target, as do Spain and Portugal. Even the progressive Netherlands and Scandinavian nations set the entitlement age higher than France, while Americans born after 1960 must wait until age 67 to collect social security benefits.
President Macron argues reform is necessary to guarantee the state pension for future generations and to reflect longer lifespans. At 83 years, life expectancy in France is among the highest in Europe; higher than Germany’s and the UK’s 82; and significantly higher than America’s 76. However, polls show that young and elderly voters remain largely unconvinced by the president’s rationale for reform.
But this and other aspects of Macron’s reform prospectus are a far cry from the ‘neoliberalism’ claimed by his most vocal opponents and his commitment to changing how the French are governed is hardly unique among the French Fifth Republic’s eight presidents. Macron’s socialist Elysée Palace predecessor also pointed to looming pension system deficits while increasing employee contributions. In fact, Macron’s modest extension to the pension age treads where presidential predecessors tried but failed.
In this, ‘Macronomics’ has involved a weighty list of measures commonplace in many competitor countries since Macron’s arrival on the French political scene following his appointment as Minister of Economics and Industry by Francois Hollande, a position in which he served for three years before running for president himself.
As a minister, Macron moved to increase the government’s minority stake in French car company Renault alongside what became known as ‘Macron’s law’ designed to liberalise France’s 3,000-page labour code. These reforms included abolishing prison sentences for employers who failed to observe the letter of complex regulations governing employment negotiations and streamlining employment tribunals.
Macron also acted to allow struggling industrial plants to negotiate severance packages without being forced to draw on the financial strength of parent companies and made it easier for firms in commercial difficulty to retrench employee hours and wages.
Minister Macron also championed reforms that came to the UK decades ago. Macron tried to significantly liberalise Sunday trading laws which previously largely permitted Sunday opening for tourist-related retail. Amid the now customary furor, the plans were watered down to allow local mayors to decide when shops could open for a mere dozen Sundays annually.
Rules governing where legal professionals could operate businesses were loosened, and deregulation allowed bus companies to operate routes alongside state-owned railway lines. Yet even these limited liberalisatons became law by decree.
Pre-presidential candidate Macron planned further reforms tackling more significant French outlier regulations but what became briefly known as ‘Macron 2’ – which was to take aim at France’s legislated 35-hour work week and wealth tax – was shelved, prompting Macron to launch his presidential bid.
What followed was a detailed manifesto for his new party, La République En Marche–the republic on the move – that included five decrees which Macron characterised as “turning the page on three decades of inefficiency.”
President Macron proposed giving firms with fewer than 20 employees more flexibility to hire and fire, enabling them to negotiate directly with employees on working terms and conditions, placing a cap on industrial tribunal payments and lowering the time limit for complaints from two years to one. Even these changes followed consultations with unions and prompted union industrial action and protest.
Undeterred and undaunted, President Macron pointed out that France’ jobless rate was almost double that of major European rivals, explaining “We are the only major economy in the European Union that has not defeated mass unemployment for more than three decades.” The government subsequently cited the largest decrease in unemployment in 16 years as a beneficial consequence of these reforms.
The Government also reduced a voluntary redundancy scheme for the civil service to curb costs long familiar to a UK audience. And, in a more interventionist move, Macron demanded EU action to restrict the time period during which firms could post workers in other EU countries, amid fears that firms exploited the freedom guaranteed by the Posted Workers Directive to relocate where social protections were lower.
Source: Byline Times
