Macron Unveils Flagship Reform with Reputation on the Line
French President Emmanuel Macron's government unveiled a major overhaul of the labor code on Thursday, a signature reform that will test his ability to force through business-friendly changes and face down protests.
The 39-year-old centrist sees overhauling France's rigid labor regulations as key to tackling the unemployment rate which is currently 9.5 percent in France -- roughly twice the level of Britain or Germany.
The measures are aimed in particular at helping small and medium-sized business by curbing the power of trade unions, limiting unfair dismissal awards and allowing bosses to negotiate working terms and conditions directly with their employees.
Prime Minister Edouard Philippe, unveiling the changes at a press conference, called them "ambitious, balanced and fair" and said they would help France "make up for lost years" of mass unemployment.
"There are differences. We accept them," Philippe said, referring to criticism from some large trade unions but praise from small business groups.
The moderate CFDT union said it was "disappointed" by the proposed changes overall, while the hard-left Force Ouvriere (FO) union also said it disagreed with many of the measures.
But crucially from Macron's perspective, neither of them said they would recommend their members join planned street protests next month by the Communist-backed CGT, France's biggest union.
The reform is a pivotal part of Macron's domestic agenda and the first step of a planned overhaul of France's social model which is set to include other changes to unemployment benefits and pensions.
The former economy minister campaigned on a promise to encourage entrepreneurship in France, pledging to make the country a better place to do business in the mould of Germany or Scandinavian nations.
"We are the only major economy in the European Union that has not defeated mass unemployment for more than three decades," he told Le Point magazine in an interview published late on Wednesday.
He warned last week that the French "hated reforms" and tried to avoid them as long as possible -- but his European partners are watching closely to see if he can succeed where others have failed.
The changes will be implemented via executive order, allowing Macron to avoid a lengthy parliamentary debate.
The overhaul will be adopted by the government next month and must then be ratified by parliament, where the president's Republic on the Move party has a large majority.
- First major protests -
The move is set to bring the first demonstrations against his government, with the CGT union, and the new political party France Unbowed calling for protests on September 12 and 23.
Philippe Martinez, the head of the CGT, said on Thursday that "all our fears have been confirmed" by the announcements.
The announcement comes at a time when Macron's approval ratings are falling sharply, signaling the end of the honeymoon he enjoyed with the public following his election.
Recent polls showed that only around 40 percent of French voters are satisfied with his performance in office, with the fall attributed by analysts to a mix of communication problems and political missteps.
The influential head of the employers' confederation Medef, Pierre Gattaz, had urged Macron to be bold with the labor market changes, which were drawn up in secrecy.
"This labor law will be bellwether of Emmanuel Macron's presidency and his desire to really reform," Gattaz said Tuesday, echoing the views of many economists.
- Leftwing opponents -
Far-left France Unbowed leader Jean-Luc Melenchon, who finished fourth in this year's presidential election, has called for a mass march against what he describes as "social welfare coup d'etat".
The labor overhauls are likely to provide fresh ammunition for opponents of Macron who accuse the former investment banker of pandering to business owners with his program, which also includes cuts to taxes and public spending.
"Macron, president of the rich?" asked a front-page headline in the left-leaning Liberation newspaper this week, pointing to research showing that his proposed tax cuts would mainly benefit the wealthy.
At present, French labor law is enshrined in the national labour code, a red book which runs to around 3,000 pages covering everything from health and safety to contract law and pensions.
Macron aims to vastly simplify the code, enshrining basic employment protections in law but leaving companies, trade unions and employees to negotiate much of the rest -- instead of requiring bosses to abide by terms negotiated by unions for the whole industry.
Source: Agence France Presse
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