Will Macron finally fix France?

French president Emmanuel Macron is launching his “flagship reform”: a revamp of France’s notoriously rigid labour market. Two previous attempts flopped – can Macron succeed?

"Crunch time for Emmanuel Macron has arrived," says Kim Willsher in The Observer. The president is launching his "flagship reform": a revamp of France's notoriously rigid labour market. Two previous attempts to shake up the "weighty and hugely complex" labour code and boost employment and growth flopped: in the 1990s there was a general strike, while under Macron's predecessor Franois Hollande, major protests prompted the changes to be quietly shelved. Could it be third time lucky?

His plan is to "bring France into the 21st century", as he puts it. One notion is to give companies more say in organising working time and pay, allowing staff to hold a referendum if powerful national unions resist. The unemployment benefit system, jointly run by unions and employers, is to be taken over by the government, allowing it to tighten benefit rules and promote training for the unemployed, not just "the system's insiders", says The Economist.

Macron wants to cap the amount of money industrial tribunals award in compensation. The administration has also talked about loosening tax and social insurance obligations for smaller firms. The overall aim is to try to make hiring and firing slightly easier. It's easy to write France off as unreformable, but Macron's odds appear better than his predecessors', reckons Jonathan Miller in The Spectator. He has total control of the National Assembly "and it is entirely composed of [people] who owe their political existence only to him". He set up a new centrist party, En Marche, so the members are not beholden to the Socialist or centre-right party machines. "Big media is behind him," while "the plutocrats want their reforms."

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

The unions appear to be in an unusually conciliatory mood. One of the more left wing, the Force Ouvrire, has said that "everything is on the table", says Willsher. The militant Communist CGT has irritated everyone for so long that its protests will not weigh as heavily with the public as they once might have.

It will be interesting to gauge to what extent Macron's wishlist could be watered down in ongoing discussions with the unions. But it is encouraging to note that he is one of the very few people who has pushed through structural reforms before. As employment minister under Hollande, he brought in a bill to deregulate cosseted professions, such as notaries, and reduce union control over working hours; Sunday shopping was liberalised too. The employers' confederation was impressed enough to herald la loi Macron as "a real step in the right direction". He now has a chance to take several more.

Andrew Van Sickle

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.