Team Macron Ready to Ride Out Anything French Unions Throw at It
Team Macron Ready to Ride Out Anything French Unions Throw at It
(Bloomberg) -- Emmanuel Macron and his team are digging in for another harsh winter.
Train drivers, hospital porters and civil servants are planning strikes in France’s major cities in protest at the president’s plans to change the pension system. Teachers, firefighters and even some police are considering their own action. And the Yellow Vest activists are urging, well, basically anyone with an ax to grind to join in.
But the government is determined that it won’t back down, according to Prime Minister Edouard Philippe.
“Every time we touch the pension system, there are strikes,” Philippe, 48, who is in charge of steering the president’s domestic agenda, said in an interview Tuesday. “I’m not saying we will avoid strikes -- even long-running ones -- but my aim is to show the French people that the future system is more advantageous, fairer, and more solid for them.”
Philippe’s ability to push through his boss’s pension policy -- dubbed “the mother of all reforms” by some in France -- will be closely watched by investors asking whether Macron will make good on his vows to turn around the French state. Or whether he’ll be thwarted by the familiar backlash on the streets that ultimately defeated the bold intentions of many of his predecessors.
The stakes are high for the 41-year-old president.
Global Protests
From Iraq to Chile, a rash of protests has shaken governments around the globe. Macron himself watched last winter as the Yellow Vest protests gave way to rioting that trashed the boutiques and cafes in the heart of Paris.
After months of violence, Macron abandoned his budget commitments to Germany and unleashed 17 billion euros ($18.7 billion) of extra public spending to appease the protesters.
But the danger isn’t over.
Philippe Martinez, the head of France’s most disruptive union, the CGT, is calling on anyone with a grudge against the government to take advantage of the Dec. 5 strikes to air their grievances. The risk for Macron and his premier is that a protest against pensions sucks in a broad spectrum of malcontents to become a broader movement that would be far more difficult to contain.
Jacques Chirac’s attempt to fix the French pension system in 1995 backfired so spectacularly that he eventually had to ditch his prime minister, Alain Juppe, in order to save his job. Francois Fillon survived his attempt to deliver a similar change -- but only for the pension system for civil servants -- for then-President Nicolas Sarkozy in 2010, but he failed to overcome the opposition of the unions all the same.
Startup Nation
Macron has made it a badge of honor to contain the benefits system as he aims to make France the most attractive destination in Europe for investors. On the tech front, the French government’s aggressive push to develop its economy is paying off with the number of startups continuing to soar, Roland Berger, a global consulting firm, said this month.
Corporate-tax cuts and labor-law reform, the core of Macron’s economic doctrine, have also helped drive a surge in employment. Bank of France chief economist Olivier Garnier has described the pace of job creation as “remarkable.”
While some of that performance is down to the spending boost triggered by the Yellow Vests, it also suggests that Macron’s efforts to raise French growth in the long run are starting to bear fruit.
Yet the president is walking a fine line.
Rising Inequality
The national statistics office says that inequality registered its sharpest increase since 2010 last year after Macron introduced a tax break for investors. The poverty rate rose to 14.7% from 14.1% in 2017, it calculated.
“We want to hold negotiations in order to convince people,” Philippe said, suggesting that the government may still be prepared to sweeten the deal for unions.
“Beyond demonstrations and the opposition, I hope we’ll manage to show that the future system is better adapted” to the needs of the country, he said. “But I do expect a passionate French debate.”
To contact the reporters on this story: Helene Fouquet in Paris at hfouquet1@bloomberg.net;Ania Nussbaum in Paris at anussbaum5@bloomberg.net;Geraldine Amiel in Paris at gamiel@bloomberg.net
To contact the editors responsible for this story: Tara Patel at tpatel2@bloomberg.net, ;Anthony Palazzo at apalazzo@bloomberg.net, Ben Sills, Robert Jameson
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