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Austerity, Macron-Style

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Photo by Jeanne Menjoulet | CC by 2.0

When French President Emmanuel Macron’s secured his sweeping majority of the Elysee Palace and parliament in May and June, it was said that only the unions had a chance of checking his power. So this week’s show of unity and strength by public sector unions – after months of squabbling – will have him worried.

For the first time a decade all nine unions representing 5.4 million public workers protested in the streets of France on Tuesday. At issue are Macron’s plans to axe 120,000 public sector jobs, to reduce sick leave compensation and freeze public sector pay. Workers in health, education, local government, air traffic controllers and train drivers are among those who went on strike.

French unions were initially divided over Macron’s policies, above all his labour reforms that undermine collective bargaining, cap unfair dismissal severance payments and reduce the role of unions, undermining workplace democracy. Traditionally the most militant, the CGT strongly opposed the changes from the outset, organising two days of mass protests in September against the attacks on labour rights.

But it found itself isolated initially, making it easier for Macron to ram through legislation, by decree, on September 22. Now the base of the two other largest unions, the FO and CFDT are starting to force their leaders to align themselves more closely with the CGT, after they failed to secure any meaningful improvements to the new laws, following talks with the Government.

With further protests and strikes called for October 19, unions hope some pressure can still be brought to bear on the government as the labour law decrees are confirmed in parliament and other measures are debated by MPs. It won’t be easy, as Macron’s upstart La République en Marche political movement has a sweeping majority of seats. And for certain, the battle won’t be won by force of argument, for evidence and facts are not deciding Macron’s policies.

Unions are at pains to point out the holes in Macron’s claims that his labour reforms are driven by the desire to cut unemployment from its current 9.5% to 7% in five years), boost sluggish growth, and will be welcomed by employers.

A study by national statistics agency Insee conducted among businesses earlier this year found “economic uncertainty” and “lack of qualified / skilled labour”, were the two top reasons for not hiring, with costs and regulations trailing in 3rd and 4th place.

The biggest determinant of France’s economic health is the austerity drive and behind that is Europe, a matter that Macron can do little about. As with most other member states bar Germany, the Euro currency is overvalued, making French exports expensive, and the draconian monetary and budgetary strictures have stifled growth and investment.

Macron has made great play of a new Franco-German relationship; one of his proposals is a Eurozone budget of hundreds of billions of euros to be used to underwrite investment projects and raise spending in countries with high unemployment. But this is fanciful. There was never ever much prospect of convincing Germany to back such a plan, and now the Chancellor, weakened and facing the Euroskeptic AfD in parliament, is even more likely to stick to her formula of destructive deficit reduction and pro-market structural reform.

And how does the structural reforms he is championing at home help produce the skilled productive workers French employers are seeking? Even the IMF is skeptical about that one, as was confirmed in a study it published in 2015. Instead, as can be seen elsewhere in Europe where flexible labour market polices have been tried over the past decade or more, it simply leads to millions of precarious jobs on low wages.

So yes, he may cut unemployment but at what cost? In seven of the 28 EU countries real wages have fallen in the past 8 years, while wage growth has slowed in the 18 of the members, and risen in just 3 – Poland, Bulgaria and Germany, according to research published earlier this year by union think tank  ETUI. Inequality of wealth and income have widened too.

In France, already pro-market austerity policies pursued by the former socialist administration in Paris have seen the loss of  thousands of skilled relatively well paid jobs in industry and in the public sector some grades have lost 20% of their purchasing power while many are now in practice on lower rates than the minimum wage, according to the FSU trade union.

But if Macron gets his way what former President Holland stole from working people will look like a very modest mugging. On top of the attack on the public sector and labour rights, Macron is planning reductions in welfare, including housing benefit.

Meanwhile, he’s reducing corporate tax and scrapping a levy on wealth. A former Rothchild banker, Macron’s programme was best summed up by the recent headline of liberal newspaper Liberation: ‘President of the Rich?’

The backlash against a supremely arrogant President began within 3 months of his election, with his personal ratings falling faster and further than any previous sitting resident of the Elysée Palace. New opinion polls confirm opposition is spreading to his policies.

According to Harris Interactive, 65% indicate they are opposed to his labour reforms and that includes 29% of Macron voters; 71% are unconvinced the reforms will cut unemployment and 63% say it will worsen working conditions. A separate survey by Elable found 54% ‘do not trust the head of state to fix the country’s social and economic problems” and 27% of those questioned don’t trust him at all.

Last week’s show of union unity in action is good news. And hastens the day when Macron – who has compared himself to the Roman god Jupiter and dismissed opponents as ‘nothings’ – comes crashing down to earth.

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Tom Gill edits Revolting Europe.

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