Are President Emmanuel Macron’s days numbered after the riots in Paris, reportedly the worst since 1968? “Facing what increasingly resembles a state of insurrection, the president and his government are looking increasingly precarious,” The Daily Telegraph claimed last week. A “beleaguered president,” “politically tone deaf,” “the youngest lame-duck president of the Fifth Republic,” goes the mix of bombast and schadenfreude in British and American right-of-center press.
Setting aside the striking oddity of conservatives proclaiming their support of violent thuggery as a means of changing public policy, the reports of Emmanuel Macron’s impending political death are greatly exaggerated. Given the president’s reformist agenda, it would have been surprising if the French, with their commitment to the status quo and a penchant for violent protests, had just quietly gone along.
This is not to downplay the seriousness of the situation. As Claire Berlinski reports, the police are understaffed and exhausted. Calling in the military was the right step, she argues, but it is also fraught with danger: “[Soldiers] are not trained to be cops; they’re trained to kill people.” The optics of military equipment in the streets are terrible too but if violence continues, it could result in deaths. And regardless of who’d be at fault in such a case, Macron would get all the blame—and understandably so.
Yet, where most accounts get it wrong is that they posit a dichotomy between an out-of-touch, establishment President enamored with globalism and environmental causes, and the righteously angry ordinary people. In fact, it is Macon who is forcing far-reaching but necessary economic changes on a reluctant population, knowing that this might be France’s last chance to reform itself. And it is the gilets jaunes, though undoubtedly reflecting the anger of those experiencing genuine economic hardship, who are an expression of efforts not only to preserve but to double down on a fundamentally broken and unsustainable status quo.
One has to wonder whether British and American conservatives who expressed sympathies for the movement are also ready to endorse one of the self-styled spokespeople of the gilets jaunes, Jean-François Barnaba. The man remains a paid official with the Departmental Council of Indre, but hasn’t held a job since December 31, 2008. As a result, he is de facto unemployed yet entitled under his contract to a substantial fraction of his salary. Barnaba, a former director of a music conservatory, was the Department’s head of culture, cultural heritage, and tourism, and headed several projects that placed heavy financial burdens on the Department’s resources. A few years ago, the outspoken, media-savvy activist hinted at his political ambitions in a self-published book. His is hardly a story of genuine economic hardship and insecurity—rather, it is a story of how the dysfunctional system of public administration can be abused by insiders.
Consider also the 25 demands associated with the movement—which incidentally make no mention of the relatively trivial changes to the diesel levy, supposedly the main factor behind the protest movement. The specific policies proposed include France’s exit from the European Union and NATO, cutting immigration, and other populist staples. But the thrust of the document is not one of radical change. Instead, it is one of doubling down on unsustainable acquis sociaux—roughly translated as social entitlements—even if those come at the cost of defying economic sense or basic logic. The gilets jaunes propose capping government revenue at 25 percent of people’s earnings and simultaneously “hiring massively” new civil servants and building five million new housing units with controlled rent, defaulting on government debt, “reindustrializing France to reduce imports and therefore also pollution,” and so on and so forth. This is an exercise in magical thinking about how nothing needs to change and about how everyone can enjoy economic security of the kind promised by the communist regimes of Eastern Europe. If anyone takes such policy ideas even remotely seriously, it is them, and not Macron, who is out of touch and living in a bubble.
Lest France move down the path of relative, and perhaps also absolute, decline, it needs to break with that kind of magical thinking, which was long shared, in a less unhinged way, by most of France’s mainstream leaders and political parties. In short, it needs precisely the kind of reforms that Macron has already introduced.
Just a few months into his mandate, Macron pushed through a number of unprecedented changes to the labor code, with only a muted response from opposition and organized labor. Redundancies have become easier and less costly, and the traditional monopoly of large trade unions over collective bargaining, especially in smaller companies, has ended.
True, the changes could have gone further, but the new law is an important step in the right direction—a step that, for example, former Prime Minister Matteo Renzi never took in Italy. France’s employment rate has since fallen somewhat, as has youth unemployment, but it remains above 9 percent. The full effects of the changes might take years to fully reverberate through the economy in the form of new labor contracts.
This year, Macron took on the state-own railway company, SNCF, burdened by massive explicit and implicit debt driven by unsustainable pension liabilities. Those are due to a number of “special regimes” that have allowed SNCF employees to retire much earlier than any other category of private- or public-sector workers. Besides transforming the company into a publicly traded (though still government-owned) corporation, the reform opens regional services to competition, and eliminates excessive employment privileges for new hires.
France’s debt-to-GDP ratio hovers around 100 percent, far above the limit of 60 percent set originally by the Maastricht Treaty. Macron’s ambition is to bring it down, along with the overall fiscal footprint of government. That is a necessary precondition for selling any form of debt mutualization in the Eurozone, or a common Eurozone budget, to any German government.
The now-abandoned increases of taxes on diesel fuels were as much an attempt at fiscal consolidation as they are a reflection of Macron’s ambition for France to be at the forefront of global efforts to address climate change. Diesel is still undertaxed in France and is therefore cheaper relative to gasoline (unlike, say, in the United Kingdom), in spite of being more environmentally damaging. It is understandable that some oppose the hikes. But the burden should be on the critics to explain what the preferable alternative is. Is it higher tax rates imposed on labor or investment, or deeper cuts to public spending? If the latter, in what area?
The President’s woes reflect the fact that the domestic reforms he is introducing rub strongly against the grain of the country’s complacent immobilisme. Is it really a wonder that Macron’s popularity has thus collapsed from above 60 percent at the time of his election to barely 30 percent, and perhaps even lower?
Macron “will go down in history not as the president who switched off public fury but who intensified it,” predicts The Spectator’s Brendan O’Neill. But if Macron fails, he will fail because his reforms have not gone far enough, just like Russia’s “shock therapy” of the early 1990s failed because it was prepared and implemented half-heartedly. Still, how reasonable is it to use the current wave of protests as the basis for wild extrapolations about his political future? If stories of successful economic reforms around the world teach us anything, it is that short-term political losses are unavoidable. Sometimes, those mean an electoral defeat and unjust vilification of those who in fact deserve credit for turning their countries around, as both Hungary’s Lajos Bokros and Poland’s Leszek Balcerowicz could attest. With enough time between the onset of reforms and the next election, deep economic reforms can generate not only economic but also political pay-offs. Slovakia’s Christian Democrats (SDKU), who revolutionized the country’s tax and pension systems and opened the country up to foreign investment, received more seats in parliament in 2006, after they introduced the widely unpopular reforms, than in the 2002 election.
Many in the English-speaking world view Macron with suspicion. True, behind the façade of technocratic market liberalism and conspicuous displays of cosmopolitanism carefully calibrated to troll supporters of Brexit and Donald Trump, a dose of the traditionally self-interested French realpolitik lingers. But that should not detract from the fact that the President has made meaningful, if still incomplete, strides to open up France’s economy to competition.
The protests of the gilets jaunes might reflect real grievances, but they cannot change the fact that France is overdue for exactly those reforms that Macron is introducing. The very worst thing the French President could do is to further cave in to the pressure, beyond the already costly concessions announced on Monday. That way, he would be guaranteed to join a long list of his predecessors who tried and failed at turning France into an economic success. It does not seem to be a stretch to think that perhaps, just maybe, it is precisely that prospect that makes some of Macron’s British and American detractors cheer for the protesters and the thugs who are trying to set Paris on fire.