The insurgent-turned-world-leader made tackling France’s dire 9.5 per cent unemployment rate a centrepiece of his campaign. Many have tried, most recently Macron’s ill-fated former boss Francois Hollande, only to hastily backtrack as the unions revolt and street protests bring cities to a standstill.
So will Macron fare any better at reforming France’s 3,000 page labour code? He has had a rocky start to his presidency, despite winning a parliamentary majority in June, and his approval rating has plummeted to unprecedented lows for a President at this point in his term. Realisation that this smooth-talker is no miracle worker seems to be dawning.
That said, on labour reform Macron has already racked up some early wins. Even the staunchly anti-change French public understand that something has to be done – 90 per cent agree that the labour code needs an overhaul. He has had some tentative success with the unions too, whose opposition to reform often manifests in scenes of violence and vandalism. Although street demonstrations are already planned for later this month, two of the three biggest unions have said they will not participate – for now.
The real question, beyond whether protests will obstruct the whole effort, is whether Macron’s reforms go far enough. Existing rules make it prohibitively expensive for businesses to dismiss workers, and this understandably makes companies reluctant to make potentially risky hires, hitting young people the hardest. Indeed, France’s youth unemployment rate is nearly double the OECD average. Under the current system, a worker deemed to have been laid off unfairly after just two years is entitled to a minimum of six months’ pay.
Macron’s plan would cap this compensation at three months – an improvement, but still expensive enough to make a business think twice about taking a chance on a new employee. He is also trying to reduce the influence of the unions by encouraging smaller firms to liaise directly with staff, and make it easier for firms facing hard times to dismiss workers for economic reasons.
It’s a good, if modest, start but the young President is a long way from following in the footsteps of Thatcher and Reagan, both of whom took on the unions early on. But given the limited ambitions of these reforms, London doesn’t have to worry about Europe’s financial services centre migrating to Paris any time soon.