Zaid M. Belbagi

By : Zaid M. Belbagi

:: Paris was rocked by disturbances last week. Masked protesters throwing stones clashed with police, who responded with tear gas and water cannon, in 4,000 demonstrations called by the biggest public sector trade union, the hard-line CGT. As the investment banker turned centrist reformer, President Emmanuel Macron, embarks upon overhauling France’s infamous labor law, he is increasingly at odds with large swaths of the public.

Since his time as Minister of the Economy under the previous presidential administration, Macron has strived to improve the French labor market. With the National Assembly under the control of his new party, by way of executive decree he aims to entirely reorganize elements of the law that have been traditionally protective of workers’ rights into a system that favors employers and companies.

After weeks of negotiation, the government has outlined measures that include a cap on payouts for unfair dismissal and offer greater leeway for companies to hire and fire. The reforms, to be implemented by decree on Sept. 22, will give companies greater flexibility to set pay and modify working conditions.

Three months into his five-year mandate, the reforms show the president has a boldness that French leaders have lacked over the past 40 years. France is in need of change. It is the only major economy of the EU that has not beaten mass unemployment, and the number of people out of work has hovered at around 10 percent (double the UK’s rate). The president has aimed to cut the rate to 7.5 percent by 2022, creating a labor market that will “free up” the economy, in the president’s words, making it “ambitious and efficient.”

With Macron’s approval ratings having dropped the fastest for any new president, the reforms threaten to isolate segments of the electorate and empower an opposition that had been weakened after June’s stunning election victory. The CGT’s leader, Philippe Martinez, has used protests to destabilize the country in a wave of instability that he has deemed “just phase one of the protests.” Events were exacerbated by the president’s reference to the protesters as “slackers,” an ill-advised comment that swelled the ranks of the demonstrators who Martinez said were “scandalized’ by his remarks.

Protesters have taken to the streets over Emmanuel Macron’s plans to relax France‘s employee-centered labor laws, but the reforms are desperately needed to make the French economy competitive.

Zaid M. Belbagi

The president faces a further challenge from leftist firebrand Jean-Luc Melenchon, who has used the reforms to oppose the government and has pledged to derail its plans, which he has labeled a “social coup d’etat” that threatens to divide French society. This is a potentially destructive turn of events for the president, who had initially faced minimal opposition and now finds the 4th ranking presidential candidate Melenchon building a leftist core that could continue to oppose the government during Macron’s mandate.

The reforms are however buttressed by the fact that France’s economic circumstances demand change. With public spending making up 48 percent of France‘s national output, the economy must be restructured to cope with the demands of the competitive 21st-century global system. Furthermore, differences between Melenchon and the unions seek to weaken their ability to oppose the president. The CGT fears the populist orator seeks to own the workers’ cause, especially since he has promised his own protests this month. The president may also take comfort from the fact that two other major unions, the CFDT and Force Ouvriere, the largest in the private sector, declined to join this week’s protests.

With a considerable chunk of the population out of work, reforms are intended to make the French market more attractive. The president has no choice but to implement them early in his term so as to quickly illustrate his ability to improve France’s economic circumstances. Specific measures to modify the “CDI” or “Contract for an Indeterminate Period” (highly protective of employee rights) and the “CDD” or “Contract for a Determined Period” (for temporary positions) will be challenging to implement but, if successful, will allow the president to then focus on unemployment insurance, professional training, the national railway company and — most controversially — pension reform.

Though the president was able to escape the domestic backlash of the protests during a visit to hurricane-struck French territories in the Caribbean last week, in future he may not be able to rein in demonstrators and the inevitable backlash from leftists. These reforms will set the social and political stage for years to come in French politics — potentially allowing hard-left Melenchon or hard-right Marine Le Pen to resurface to challenge the president.

:: Zaid M. Belbagi is a political commentator, and an adviser to private clients between London and the Gulf Cooperation Council (GCC). Twitter: @Moulay_Zaid

:: Disclaimer: Views expressed by writers in the Column section are their own and do not reflect RiyadhVision’s point-of-view.

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