Macron's First Year Saw Him Shelve His Best Reforms

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(Bloomberg) -- One year after the election that ushered in the youngest president in French history, Emmanuel Macron isn’t interested in assessments; his reforms, he says, will take a few years to bring results.

But one thing is certain: Macron has quietly shelved the best ideas from his campaign and the early days of his administration.

The first shelved idea was a plan to allow people who resign from their jobs to access unemployment benefits. In France, contributions to a national unemployment insurance fund are taken out of employee paychecks; it is then used to pay benefits to those who are laid off from their jobs. When Macron put forward this idea during his campaign, it made a huge splash and boosted his support levels; the Macron opponents among my friends all said it was his best idea.

French workers who leave their jobs are not entitled to any benefits, even though the unemployment insurance system is theoretically a forced savings scheme rather than a welfare scheme. The upshot is that an employee who wants to leave her job would rather be fired than resign. However, French bosses are terrified of firing workers because under the highly protectionist French labor code, that is fraught with legal risk. (Macron’s labor market reforms straightened this out a little for corporate lay-offs, but not for terminations of individual employees.)

The practical impact of this set-up is that whenever a worker is unhappy, a sort of cold war opens up. The employee’s goal is to become so useless that the boss has no choice but to fire them (but not so useless that they can be fired for cause, in which case they get nothing), while the boss’s goal is to make the employee’s environment so untenable that they decide to resign anyway.

The phenomenon is a huge brake on matching the right jobs with the right employees, therefore a drag on productivity. And at the micro level, this means that, at any given point in time, there are hundreds of thousands of miserable French workers and bosses waging Dilbertesque trench warfare on each other instead of doing their jobs and turning their workplace’s culture toxic. It’s a distillation of a broader French disease Macron is trying to defeat: The obligation to focus so much energy on figuring out how to game the system that there’s little left for being productive or happy. No wonder even Macron’s detractors applauded his proposal.

But it proved expensive and Macron short-sightedly decided to open his term with a focus on deficit reduction instead. Employees who resign can only get benefits if they can prove they are resigning to pursue a career change, and then only once every five years. The smart thing would have been to reduce unemployment benefits overall to finance this proposal, but that would have been politically explosive.

Macron’s other idea would also have had a transformative impact on professional culture — this one in the public sector. Soon after his election, Macron’s office announced that all directors of ministerial bureaus would be audited for performance; those whose performance was deemed unworthy would be removed from their posts.

This indeed would have qualified for the word “revolution” which Macron likes so much. (It was the humble title of his campaign book.) France’s immovable mandarins are the true power in the country. Senior civil servants are adept at using every tool in the box to get their way.

To actually hold department heads accountable would have radically changed the culture of the whole French civil service. French presidents have always had the formal power to remove any civil servant they like, but in practice they don’t dare. To change the system would have required no major legislation — only political will.

Macron, however, backed off. Macron’s office announced that a preliminary review of the performance of department heads would take place two months after the beginning of the new term; this was later postponed to six months; then, indefinitely. After a terrorist attack in Marseille two months into his tenure, Macron dismissed the local prefect (the senior civil servant who oversees law enforcement in each district), an utterly unprecedented step but apparently a one-off move.

Indeed, Macron has strengthened the hand of the civil service, by passing a decree stating that ministers may not have more than 10 employees on their staff, down from 20 to 30. Large ministerial staffs are often criticized as an extravagance, but they have typically been a minister’s sole weapon to fight civil service mandarins. Officials need their own eyes and ears; getting anything at all done usually requires every department head to be shadowed and badgered by someone from the minister’s office.

That’s two potential revolutions aborted. If we’re tallying Macron’s first-year successes — and there are surely some to be celebrated — those have to go down as missed opportunities.

©2018 Bloomberg L.P.

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