Macron Ends Annus Horribilis, Calls on the Efforts of All French

(Bloomberg) -- French President Emmanuel Macron urged his fellow citizens to look at “reality face-to-face” and embrace future reforms and modernization as he’s confronting fierce opposition to his plans for the euro zone’s second-largest economy.

“The anger of 2018 shows we are not resigned -- we want to build a better future,” Macron said, in a nod to the the Yellow Vest grass root movement roiling the country. The 16-minute address broadcast nationwide Monday night was taped in his office at the Elysee presidential palace in Paris. Standing before a window, Macron gestured to emphasize certain points and flashed a smile when talking of the future and of the country’s World Cup victory in July.

The French leader, in keeping with presidential practice, offered his review of the last year while extending best wishes to the nation for 2019. He called for “truth, dignity and hope” and said that “our future will be insured by recovering our unity and by an effort by each and everyone.”

His remarks come just a few hours before new year’s celebrations safeguarded by heightened security measures. French police are taking extra precautions to protect public spaces amid a terror threat and a possible resurgence of Yellow Vest protests. About 12,000 security personnel will be spread out across Paris, especially around the landmark Champs Elysees avenue where protesters plan to join the thousands of revelers who gather annually to greet the new year. Police closed the avenue down before nightfall.

Testing Year

Macron is closing his annus horribilis, or terrible year, as French media have called it. After rock star beginning to his presidency in 2017, the past year has posed a major test of the 41-year-old leader’s resilience. Macron in 2018 has suffered the defection of top cabinet members, a personal bodyguard scandal that’s raised questions about his judgment, communication blunders by his Elysee staff, and a popular revolt, dubbed the Yellow Vest movement, that won’t soon go away.

Despite the revolt against his policies and his leadership style and personality that some critics have called “arrogant,” Macron has pressed on. He said the French people should stop their “self-deprecation” but also end the “blatant denial of reality: we cannot work less and earn more, cut our taxes and raise our spending, change nothing to our habits and breathe pure air. No ! We have to look at ourselves just as we are and that we accept” reality.

To former Socialist Party presidential candidate Benoit Hamon, the president “has no solution or nor does he have the temper to exit the crisis” in which he finds himself, Agence France Presse reports, citing a speech in Paris. National Rally leader Marine Le Pen said on Twitter the president was “an impostor.”

And looking ahead to 2019, a host of potential pitfalls await the president.

He has vowed to maintain his two major reforms, the unemployment benefits program and pension reform. Both are pillars of the French welfare system and any attempt trim those benefits may prove difficult. The year will also kick off the implementation of income tax withholding, a policy innovation for France that may come as a shock to taxpayers.

Europe, ‘National Consultation’

Macron also called on voters to take part in the May 2019 European Parliament elections that may prove challenging to his own party. He pledged to present a “renewed European project” to his citizens as his plans for a more integrated European Union and euro zone have failed to rally other nations in the Old Continent.

In an effort to address rising discontent and falling poll numbers, the government, led by Prime Minister Edouard Philippe, will organize a three-month “national consultation” to gather demands and grievances while also arguing for Macron’s agenda.

So far the president had brushed aside the decline in his popularity as a sign that he was making tough, strong decisions and getting things done. Not even halfway through his five-year mandate, many pollsters have his approval rating at under 30 percent, with Ipsos showing him down to 20 percent, his record low and on par with his very unpopular predecessor, Francois Hollande.

Polls, Economy

The new year’s address was Macron’s second national speech in the space of a month. On Dec. 10 at the height of the Yellow Vest protests he took to the airwaves to offer his apologies for failing to fully grasp the nation’s mood while conceding that France is facing “a state of social and economic emergency.” He promised over 10 billion euros ($11.5 billion) in public spending to help low wage earners and struggling pensioners.

But the mea culpa may still be insufficient. A survey released after the very public apology and extra spending showed support for the movement remained at 70 percent. Macron again blamed “hateful crowds” that have mingled with the Yellow Vest protesters for inflaming unrest.

The French economy has given Macron little help thwarting the social turmoil.

A surge in growth in 2017 came to an abrupt end in the first half of 2018 as bad weather and prolonged transport strikes sapped production and demand. The rebound over the summer proved weaker than expected and hopes of an acceleration were crushed by the Yellow Vest protests at the end of the year.

Both the Bank of France and statistics agency Insee cut their growth forecast in recent weeks to just 1.5 percent for 2018, down from 2.3 percent in 2017. BoF sees 1.5 percent growth for 2019.

A weaker economy has slowed job creation, giving Macron little to show for his labor reforms. Unemployment will stand at 9.1 percent at the end of 2018, slightly higher than a year earlier, according to Insee forecasts.

©2019 Bloomberg L.P.