Partners
Review The current disruptive strikes in France

Review: The current disruptive strikes across France

Tom Urbaschek
Tom Urbaschek is currently studying for his Economics and Business economics bachelor’s degree (BSc). Writing for Asset | Economics' Blog Committee is one of his extra activities alongside his study. Subjects of his interest are the fields of behavioural economics, marketing and macroeconomics.

As tens of thousands of people took the streets across France throughout the last couple of weeks, President Emmanuel Macron’s social and economic policy seem to have struck a nerve. The Macron government has insisted to overhaul France’s rail system and to bring changes to employment benefits and the pension system. This quite revolutionizing agenda has lead to actions of protest from railway workers and air traffic controllers to teachers and students.

Despite the controversial agenda put forward by Mr. Macron, the uproar does not come as a surprise when we take a look at the president’s approval rating. Since president Macron’s election on the 7th may of last year, which he won with 66.1% (New York Times) of the votes, his approval rating has plummeted. Although this is common for presidents and especially for French presidents, Macron’s popularity has fallen faster than for any French president ever. Where the reason behind former president Hollande’s decision to not seek for reelection allegedly would be his approval rating, Macron is more unpopular than Hollande was after 100 days in office (Independent).

However, Mr. Macron is not more unpopular than his predecessors were at the same point in their terms, so he must be doing something right. Macron was primarily elected on promises that he would push through the reforms of which his predecessors failed of doing so. While making these promises he identified himself as being neither left nor right. Having created an image of being a productive president, the president does follow through on his plans. So what does Macron’s agenda mean specifically for Europe’s second largest economy?
 

“The world is not the way it was before.” – President Emmanuel Macron

 
First and foremost, the French rail system is up for a major overhaul. Macron wants to eliminate the special prominent position the state-owned rail company, SNCF, and its workers have. French rail workers namely enjoy a lot of benefits, like the option of retiring at 52. Benefits like these date back to the 20th century when railway jobs involved hard physical labour, and therefore are out-of-date according to the Macron government.
Also there are plans to liberalize the rail system entirely, which would allow more private contractors and some form of competition. The time of SNCF being a natural monopoly seems to be coming to an end, closing the book on a heavily subsidized and deeply indebted sector. According to Mr. Macron “the world is not the way it was before” and additionally pledges to cut thousands of jobs among civil servants (New York Times). It is up for debate whether this would be a form of market deregulation rather than market modernization.

Moreover, one of Macron’s aims is to render the labour market more fluid. The last decade in France has been characterized by a fairly high rate of unemployment, more specifically around 10 percent of the work force. The president’s aim is to reduce this rate to 7 percent over a period of 5 years. The measures proposed include modifying the two main working contracts.
The ‘Contract for a Determined period’ (CDD), which is applicable to temporary positions, is being more liberalized as it is. Perhaps the most controversial would be the ‘Contract for an Intermediate Period’ (CDI). This contract is used for permanent positions, which is highly protective of employee’s rights. The comparison may be made to a ‘vast arbeiderscontract’, which is the common term used in the Netherlands. Employers find this contract to be too rigid and would like to have it liberalized, leading to a understandable conflict between employees, trade unions and employers.

Lastly, there will be changes introduced to the pension system. Macron and his government want to transform the 35 different pension schemes the country has into one. Each system gives workers different rights, also it causes a lack of transparency and a discouragement of job mobility. These measures will have a relatively significant impact on people with rather vulnerable positions, like teachers. Still the pension system reform is seen as a necessity for France in order to stimulate growth and economic well-being.

Though tens of thousands are protesting on the streets across France in disagreement, president Macron is determined to act and reform. Wanting to be a productive president he is trying to push major overhauls in several traditional sectors of the French economy. Modernizing the national rail system, the workforce and the pension system are the three pillars which his current agenda is based on. Whether Macron will be remembered as the French ‘Iron Lady’ and whether his measures are economically successful only time will tell.
 
 
 
Reference list and further reading

Rubin, A. J. (2017, May 7). Macron Decisively Defeats Le Pen in French Presidential Race. Retrieved from The New York Times:
https://www.nytimes.com/2017/05/07/world/europe/emmanuel-macron-france-election-marine-le-pen.html

Stone, J. (2017, Aug. 14). Emmanuel Macron’s Popularity Falls Faster Than Any French President Ever. Retrieved from Independent:
https://www.independent.co.uk/news/world/europe/emmanuel-macron-poll-100-days-unpopular-hollande-approval-rating-worse-a7892366.html

Rubin, A.J. & Peltier, E. (2018, Mar. 22). Strikes Disrupt France As Thousands Protest Macron Overhauls. Retrieved from The New York Times:
https://www.nytimes.com/2018/03/22/world/europe/france-strikes-protest-macron.html

Pedder, S. (2018). Emmanuel Macron: France’s Man With A Plan. Retrieved from The Economist:
http://www.theworldin.com/article/14405/edition2018frances-man–plan

Leave a Reply

Your email address will not be published. Required fields are marked *