Frustrated France

Frustrated France

Macron must grasp the nettle of labour market reform and be ready to face down an autumn of union discontent

The honeymoon is over for Emmanuel Macron, the French president, who on his inauguration was hailed as Europe’s golden boy. One hundred days later and he is less popular even than his unloved predecessor, François Hollande, was at the same point in his presidency.

The problems confronting Mr Macron are remarkably similar to those faced by his predecessor. France’s employment figures have only just returned to the level they were when Mr Hollande took office in 2012, four years after the crash. He vacillated too long in his attempts to reform the labour market and was punished for it. Mr Macron will not find the task any easier. To break out of this stagnation, he will have to succeed where a generation of past leaders failed.

The president has failed so far to get a serious grip on the levers of power. In his short stint at the helm, expenses scandals have destabilised his cabinet and forced the resignation of ministers from his centrist coalition partner. He has struggled to mould La République En Marche, his new party, into an effective tool for governing. Reports in the French press suggest a government struggling under intense pressure. Cuts to ministers’ staff have compounded the difficulty of crafting and implementing reforms in double-quick time.

Foreign investment in France is growing, but it still lags behind Britain. This is not for lack of talent or infrastructure but chiefly because of the difficulties French start-ups face in raising capital. Companies find it harder to create full-time jobs because of the high cost of hiring and firing staff, high social insurance costs and a lack of flexibility in working hours. These comprise Mr Macron’s great challenge. Unemployment in France has sat stubbornly at about 10 per cent for the past five years. Mr Macron has pledged to reduce it to 7 per cent by 2022. It will be an uphill struggle.

The president enjoys a large majority in the national assembly, having profited from voter distaste for the ultra-nationalism of his rival Marine Le Pen. He has also enthused many younger metropolitan voters with his fresh élan. However, he has not yet won or even begun the battle for labour market reform, nor persuaded the electorate as a whole that the country is in urgent need of an overhaul. Mr Macron is an unabashed supporter of the free market but has failed so far to overcome the deep-rooted anxieties of the French about a liberalised economy.

Budget cuts proposed by the president have already led to the resignation of the head of the armed forces, General Pierre de Villiers, and protests from university teachers and unions among others. The union movement has already indicated that it will resist as he tries to impose labour reforms. Mass industrial action is virtually inevitable: the first big demonstrations are scheduled for next month.

To date, too much of Mr Macron’s presidency has been about spectacle. Certainly his posturing has infused the office of president with some of its old pomp. To demonstrate strength he gives Donald Trump a bone-crushing handshake and attempts to awe Vladimir Putin, the Russian president, in the palace of Versailles. Yet this embrace of gesture politics will be interpreted by the French, and by his European partners, as little more than narcissism unless he embarks on a coherent reform agenda.

As early as this autumn there will be a moment of reckoning. Disgruntled workers will take to the streets to test his resolve to drive through reforms. Other leaders have had to do the same. Margaret Thatcher stared down the unions. Ronald Reagan faced a similarly stern test with US air traffic controllers. Such steeliness ultimately enabled Britain and America to revive moribund economies. The French president must find the will and nerve to do the same.

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