Thursday, August 31, 2017

Has Macron Sliced the Gordian Knot?

Emmanuel Macron badly needs a win. I think he may have it. His labor code reform is out, and there has been no earthquake. It seems unlikely there will be. I'm working on a longish magazine article, but here is my initial reaction:

Today, the details of the reform proposal were finally released. A key provision was a reduction of the maximum indemnity available to employees deemed by a review panel to have been fired without cause. In return, labor received a sweetener: an increase of 25 percent in the compensation due to employees judged to have been laid off for legitimate economic reasons. But, to the unions’ displeasure, employers can now claim to be in economic difficulty if a plant in France is unprofitable, notwithstanding profitable operations outside France. The unions are also unhappy with a provision allowing small firms more room to negotiate with workers directly, without the presence of a union representative.
 On the other hand, the government offered a number of new benefits designed to win union support, including a training allowance for union members who wish to expand their skills and a new office to ensure that companies do not violate rules governing collective bargaining.
 The olive branch extended to the unions may prove effective. Force Ouvrière, the third largest union in France, has announced that it will not participate in the general strike called by the second largest union, the CGT, for September 12. Since FO had been one of the most vociferous opponents of a previous labor code reform, this is a sign that Macron may have sliced the Gordian knot of labor code reform. The country’s largest union, the CFDT, has long been more receptive to liberalization of the labor laws than its two rivals and had already refused to join the CGT. But CFDT leader Laurent Berger said[ that he was disappointed by the provision narrowing the definition of economic difficulty to operations within French borders. He nevertheless characterized other provisions of the reform as “productive” and “intelligent.” He also indicated that the government had withdrawn certain proposals in response to union objections and said that the final result was not “the destruction of the labor code that some critics have proclaimed.”
 As is often the case in French politics, the symbolism of the reform has come to overshadow the substance. The measure is widely seen as a test of Macron’s strength and resolve. Proponents make the exaggerated claim that persistent high unemployment in France is due primarily to labor-market rigidity, which the reform will fix once and for all. Opponents, led by the fiery orator Jean-Luc Mélenchon of France Insoumise and the mustachioed union boss Philippe Martinez, hope to gin up the fervor of their troops by presenting the measure as an all-out assault on the anti-neoliberal resistance (although Martinez did not refrain from participating in negotiations to obtain a better deal for his members, he did not back down from his call for a general strike after the results were announced). While the clash will be dramatized for maximum political effect on both sides, the outcome looks more like an incremental shift toward lighter labor-market regulation rather than a wholesale jettisoning of France’s byzantine labor code.


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Friday, August 25, 2017

Poincaré's Postage Stamps




With the news that Emmanuel Macron spent €26,000 on makeup in the first 3 months of his presidency, les mauvaises langues were quick to make the comparison with François Hollande's €10,000 a month hairdresser's bill. Being historically minded, I thought rather of Raymond Poincaré, who is said to have reimbursed the government for the postage stamps he used while in office. Or of General de Gaulle, who scrupulously paid his grocery bill at the end of every month.

In one of my articles on Macron, I opined that his ambition was to walk on water, and for a while he seemed quite successful at it--or at least at creating the illusion that his buoyancy knew no bounds. Alas, he has been sinking rapidly of late, and not just in the polls. Ordinarily I think it churlish to hold les grands de ce monde to the same standards as the rest of us. But there are limits. It's no doubt excessive to insist that the head of state pay for his own postage stamps. But if he thinks he needs €26,000 euros worth of face paint to be an effective "pedagogue," as he put it the other day, able to persuade the recalcitrant French of the need for reforms that they instinctively "detest," perhaps he could send one of his flunkies to Le Drugstore to pick up his cosmetics at a discount. Pour encourager les autres.

Thursday, August 24, 2017

En Même Temps

During the campaign Emmanuel Macron became notorious for his frequent use of the phrase "en même temps." It was his trademark segue from left to right or vice versa, a device for having his cake and eating it too, giving with one hand and taking away with the other, etc. Now that he is president, en même temps is back (although yesterday he put it slightly differently: dans le même temps). But now it's Europe where he shows his left profile and the home front where he turns sharply to the right.

Europe has long served as an alibi for French governments. We don't want to take this painful step, they would say, but Europe is forcing our hand--applying leverage often handed to Brussels by the very same people, but never mind.

Macron's two-step is different. He doesn't claim that Europe is forcing him to do anything. Rather, he pretends to be forcing Europe's hand by invoking its better angels. Yesterday's blast was aimed at social dumping. This plays well in Poitiers, of course, and less well in Poland, which serves the president's purpose perfectly. In Europe he can be the champion of the (French) working man. Mais en même temps, at home, his government was announcing that a reduction in worker-paid payroll taxes promised by Macron on the campaign trail will be partly delayed.

Economic policy at home, firmly in the hands of the Macronian right, continues to obey an accountant's logic: we set ourselves a bottom-line budget reduction goal, hence x % must be shaved off every line, no matter how bad the political optics. This move is as ill-considered as the reduction in the housing allowance (APL). It looks callous. A cannier politician wouldn't do it. Macron, for all his mastery of showmanship, at times seems as tone-deaf as Hollande. Or perhaps he hears the sour notes and thinks he can drown them out by speaking loudly on the European stage. It isn't going to work, and the mistakes are piling up at the worst possible moment, just ahead of crucial decisions regarding labor code reform and the budget.

Wednesday, August 23, 2017

Out with the New, In with the Old

Two names one had thought definitively removed from the news have resurfaced in the past two days. First, François Hollande, who had imposed a decorous silence on himself following his ignominious ejection from the presidency, apparently felt that the opportunity for vengeance had come. His "spiritual son" is in trouble, the negotiations over the labor code reform are coming to a head, and the time for mischief was maximally ripe. The ex-president's perfidious side could not resist, so he issued a "warning" to Macron that ... he must not go too far. And there you have Hollande in a nutshell: both the perfidy and the paralyzing caution, the penchant for saying too much and the penchant for not saying enough. He reminded everyone why they were glad to be rid of him. Perhaps in the end he will have helped Macron.

And then François Fillon, who has thrown in his lot with a new group of financial buccaneers, Tikehau Capital. Now he can buy his own suits (unless the state decides to buy him one by sending him to prison). The hedge funders hope to rely on his "international expertise." Can an overture to Russia, whose leader expressed admiration for Fillon during the campaign, be far behind?

Friday, August 18, 2017

A Word from the Techies

Astute readers will have noticed that the blog URL has changed to secure HTTP: the prefix is now https rather than http. If you use the old URL, you will be redirected automatically. This change has been mandated by our benign overlords Google to improve Web security, a public good we all enjoy. You may want to change your bookmarks and feed aggregators accordingly, although in most cases this shouldn't be necessary.

Maybe it will help to cut down on the comments spam, of which I see a good deal more than you do, since much of it is intercepted before it can try to sell you a vacation in Cambodia or a cure for herpes.

The Management

Robust Growth Ahead for France

UBS is forecasting the fastest growth rate of the French economy since the crisis. If the forecast is correct, Macron will reap the benefits of the Hollande-era reforms (plus cyclical recovery stemming from inventory replenishment and pent-up consmer demand) without lifting a finger. French unemployment is also at a 12-yr low. Indeed, UBS worries that if he overexerts himself by lifting too many fingers (read: labor code reform), he could hinder the recovery just as it gets rolling. This is the only cloud the analysts see on the horizon.

This is the kind of problem every president wants to have. And yet the mood in France is once again morose, after the brief euphoria of May. A glance at the US should reveal to the French how lucky they are to have dodged the populist bullet now firmly lodged in the American spine. Courage, chers amis. You don't know how good you have it.

Wednesday, August 9, 2017

Macron Seeks More Clout in Brussels

According to the Financial Times, Emmanuel Macron is seeking to have Bruno Le Maire replace Jeroen Dijsselbloem as head of the Eurogroup, the committee of finance ministers who set Eurozone policy. Failing that, he'd like to see Odile Renaud-Basso become the head of the so-called Working Group within the Eurogroup. Meanwhile, he's also pushing for the creation of the post of Eurozone finance minister--a move to which the Germans may accede. Agreement on any of these proposals would signify progress toward a Franco-German entente on Eurozone policy, which is long overdue. But any decision may be delayed until after the German elections in the fall.

Tuesday, August 8, 2017

The New New Left and the New Old Center

La France Insoumise would like to replace the near-defunct PS as the party of the left. In keeping with its "insoumis" label, however, it is encountering difficulty in achieving the kind of party discipline necessary to such a role or even to resigning itself to the fate of becoming a party rather than a movement:

Cette soif démocratique sera nécessairement débattue à Marseille. Sur une note de blog publiée le 28 mai, Jean-Luc Mélenchon assure que des processus de « démocratie interne » sont à l’œuvre mais il veille à ne pas en faire un « sujet de conflictualité interne » : « Il n’y a donc pas de “majorité”, de “minorités”, pas de plates-formes concurrentes, pas d’orientation générale opposée aux autres. Autrement dit : le mouvement se soucie d’abord d’être inclusif et collectif davantage que formellement “démocratique”, sachant à quelles violences et dérives conduisent les soi-disant pratiques “démocratiques” organisées par les règlements intérieurs des partis traditionnels. Le mouvement n’a qu’une référence idéologique commune à tous ses membres : le programme. »
Rather than learn the lessons of Occupy Wall Street, La Nuit Debout, Les Indignés, Los Indignados, etc., LFI seems intent on repeating their mistakes. The energy of youth brings with it the illusions of youth--or the rhetoric of the rusé Jean-Luc, who knows the meaning of democratic centralism and evidently prefers the swooning obedience of un parti godillot to the "violences et dérives [auxquelles] conduisent les soi-disant pratiques “démocratiques” organisées par les règlements intérieurs des partis traditionnels..." One does have to love that soi-disant. But who am I to give advice to such an expression of le peuple authentique?

Of course, the difficulties of organizing a party among the legions of the (tolerably) like-minded are as nothing compared with the difficulties of organizing a government capable of dealing with the multiple conflicting interests that the polity comprises. Coping with the latter is the challenge facing La République En Marche, a challenge that it has met with the varying degrees of success to be expected after the dramatic changes that swept over French political life in May and June. I am therefore forbearing in my criticism, unlike any number of you readers, who have leapt to the conclusion that Macron has either already failed or, if you are of a somewhat different ideological bent, succumbed to the contradictions inherent in the ideology of "en même temps" supposedly embodied by the neoliberal weasel.

Heavens! There is still a long way to go, even if the first 100 days have elapsed, requiring the usual outpouring of overwrought assessments. Steady as she goes. Fluctuat nec mergitur. We shall see what happens when the general strike called for Sept. 12 takes place. On that day I am supposed to be in France taking a TGV from Paris to Bordeaux. If the scene at the station is sufficiently bordélique, I may join the chorus of doomsayers. Until then I say, Keep your shirts on. Nothing much has happened yet. France has commenced its fermeture annuelle and transhumance of the vacationing classes, the newspapers are devoid of actual news, all the political commentators are away on holiday, and even the president seems to be making himself scarce after his round of partying with the likes of Angela Merkel, Justin Trudeau, Vladimir Putin, Mr. and Mrs. Trump, and Rihanna.

Thursday, August 3, 2017

French Employment Picture Improves

The Financial Times notes a marked improvement in the French job market. An annual survey by
Pôle Emploi shows that hiring intentions of French employers are up 8.2 percent over last year. In the increase is 22.5 percent. The paper attributes the increase to labor market reforms initiated under Hollande (when Macron was minister of the economy).

Wednesday, August 2, 2017

Bye-bye Solférino

It looks likely that the PS will sell its headquarters on rue Solférino in order to keep the wolf from the door. The decimation of the party in the presidential will cut deeply into its revenues, and there's just not enough money to keep the lights on at Solférino.

Some Socialists are trying to put the best possible face on this debacle. It will help the party reconnect with its "popular base," says Olivier Faure, and this is supposedly hard to from a "power neighborhood" like the 7th Arrdt. A mauvaise langue might point out that having its HQ in the 19th hasn't done much for the PCF, but let's not be churlish. The Socialists are hurting, and if they want to pretend that the impending eviction from Solférino is a matter of choice rather than necessity, who would want to stop them?