Can Macron get France moving?

Can Macron get France moving?

French President Emmanuel Macron’s start-up party En Marche! (“On The Move”) has one last hurdle — Parliament. Legislative elections taking place on June 11 and 18 are crucial for the president to be able to thrust legislation through the National Assembly.

An exciting yet risky moment for the popular movement, it will be interesting to see if and how it can adapt to party politics in the coming few months. As Macron seeks to pass a reform of labor regulations by the end of September, followed by overhauls of the unemployment insurance system and professional training later in the year, elections in June are of central importance if he is to be able to embark on implementing his agenda.

Last month the pro-reform, pro-European Macron emerged triumphant from the presidential election, removing the prospect of the National Front being yet another empowered populist party. The threat of a global financial upset has since dissipated for now, with euro zone stocks rising by 33 percent since the Brexit vote last June. However, the new president must act swiftly to improve France’s economy to offset the challenges that had initially caused the rise of populists across Europe.

France remains the third largest economy in Europe and the sixth largest in the world. But since the financial crisis of 2008, national gross domestic product (GDP) has grown at half the rate of that in Britain and Germany.

The French state maintains heavy interference in the economy, and as global competitiveness increases, France requires rejuvenated fiscal policies to avert catastrophe. At present, France maintains the highest levels of public spending among the G-7 economies; according to the IMF, this amounted to 56 percent of GDP in 2016. This is of grave concern given that the level of public debt dwarfs that of Germany. Though growth has picked up since the election of Macron it is essential that he is able to equip his political movement with the parliamentary tools to push his reformist agenda through.

How Macron converts his 66.1 percent landslide into a sizable win in the legislative elections is key. En Marche! plans to run candidates in all 577 constituencies; at least half are planned to be from civil society — the other half having previously held political office — and half being women. This is an ambitious plan for a movement that does not have established local branches nor any seats in Parliament.

Having the experience and logistics to campaign for the seats on offer is difficult even with an established party. Transforming a good score at a presidential election to parliamentary seats is notoriously difficult. A good example of this problem is Centrist Francois Bayrou — who incidentally is a supporter of Macron. Bayrou won 19 percent in the first round of the 2007 presidential election, but his party still only managed to win three seats in Parliament a month later.

How the new president converts his 66.1 percent landslide into a sizable win in the legislative elections is key. 

Zaid M. Belbagi

Overcoming this challenge is key as French presidents derive their power from the support of a majority in the lower house of Parliament. Though the constitution of the French Fifth Republic, created in 1958 by Charles De Gaulle, extended presidential powers, it falls short of allowing the president to rule alone. In reality, there are few presidential powers that do not require the prime minister’s authorization. The president can appoint a prime minister, dissolve the National Assembly, authorize a referendum and adopt “temporary dictatorial powers” in circumstances imperiling the nation. Although these are important powers, they do not amount to running the country. Importantly for Macron and his reformist agenda, the president cannot suggest nor pass laws and then implement them without the prime minister.

The French president must rather be viewed as a “referee,” with powers of oversight and the ability to intervene when institutional standoffs occur. It is therefore essential for the smooth running of government that the president has a prime minister and parliamentary party that are able to carry out his manifesto pledges.

Macron aims to kick-start the French economy through several reforms designed to complement a €50 billion ($56 billion) stimulus plan. He plans to bring down public spending to 52 percent of GDP and cut 125,000 civil service jobs. These reforms will face opposition, making it critical that Macron wins a majority in Parliament, or indeed build a coalition of like-minded parliamentarians.

The biggest challenge facing Macron is France’s 3,500-page labor code. This extensive and detailed set of laws and regulations governing labor and employment is a challenge to both employers and employees. In intending to simplify it, Macron aims to overhaul pensions, working hours, lengthy employment tribunals and give companies greater oversight concerning hiring and other aspects of employment relations. In an environment where the powerful unions have been accused of complacency and in some cases corruption, Macron plans to establish government control over their fiefdoms. In particular, Macron aims to give the government control of the unemployment benefit system and the associated €30 billion training and skills budget with a view to refocusing spending on jobseekers.

Liberalization of the French labor market will make the economy more dynamic, supporting growth in the long term. However, the big issue of unemployment will remain because, while regulations can help, the aggregate demand for labor must increase for a dramatic improvement to take place. The essential ingredient for Macron to succeed is stability in the euro zone, which would allow for an improvement in the bloc’s economic circumstances. Without this, his movement could have small wins locally but fail to make the economic overhaul that France so desperately needs.

• Zaid M. Belbagi is a political commentator. He also acts as an adviser to private clients between London and the Gulf Cooperation Council (GCC).

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