It is not long until Emmanuel Macron will have been in France’s top job for a year. His domestic approval ratings are not great. Despite his party’s sweeping electoral victory, in France 58% disapprove of his leadership. Presidents, though, are not judged in the history books by their first year approval ratings.
During the presidential election, Macron’s pitch was clear. He was the pro-European, politically centrist candidate. Since the election, public perception is that the first part has remained yet the second has faded. His economic policy has been remarkably neo-liberal in tone. Taking on the unions over strikes is the most obvious example, but the trend goes further. Tax cuts, reducing the number of civil servants and making their pay performance-related fit the bill. He is even set to open up France’s nationalised railways to foreign competition.
The problems ailing France today are not dissimilar to the challenges which faced Margaret Thatcher at the dawn of her premiership. Excessive regulation, inefficient publicly owned industries and extensive union power are huge issues. If he is successful in taking on the unions, streamlining the civil service and privatising the railways, Macron could revitalise the French economy.
If he does so, Macron would certainly be called a French Thatcher by the press. Yet actions such as taking on the unions are not necessarily indicative of a shift to neoliberalism. More abstractly, they represent a shift away from the failed socialist policies which have plagued France for too long. It is too soon to say where exactly the shift will be to.
Some say Macron aims not for a ‘neo-liberal’ society, but for one in the mould of the Nordic economies. His labour market reforms, for example, make it easier for employers to fire workers, but simultaneously he aims to provide more support in the form of benefits for the unemployed. Denmark uses the term ‘flexisecurity’ to describe such a system, something Macron has borrowed.
For France to approach a Nordic model it must first fix many of the underlying issues in its economy. In September, Macron controversially described France’s people as ‘slackers’. As is so often the case in countries run on socialist economics, the country’s workforce is unproductive. The SNCF, France’s state-owned railway company, has run up huge debts because many workers are guaranteed a job for life regardless of performance and drivers can retire at 50. Macron regards this as the embodiment of the issues in the labour market.
Of course, many believe Nordic countries are socialist themselves. This myth persists especially in British politics amongst defenders of Jeremy Corbyn. It is not the case. Rather, these countries combine market-based capitalist economies with extensive welfare states and social programs.
If it is not clear what Macron’s intended final destination is, it is certainly clear what it should be. France has needed its own Margaret Thatcher for some time. Emulating the Nordic countries is an attractive thought, but harder than it sounds. Their model is sustainable in part because they do not spend nearly as much as countries like France on defence. Countries like Norway benefit from a tiny population and huge oil reserves which fund its social programs. France does not have such luxuries.
Macron should make market liberalisation one of his foremost objectives. Slashing red tape, tax cuts and making the country as attractive as possible for business would not necessarily be popular with unions and France’s significant far left factions, but they would be good policies to stimulate productivity growth and help France get back on track.
Not only are such policies sound economics in general given the current state of the French economy, but with the UK positioning itself as an investment hub highly attractive to business after Brexit, improving competitiveness will be important for many European countries.
Will Macron go all the way down the radical liberalisation path, then? Probably not, given the political climate. If the aim is the best economic outcome for France, though, it’s exactly where he should be headed.