Macron Seeks Blair Moment in France for Hollande’s Economic Push

Emmanuel Macron wants to do a Tony Blair on France.

The 36-year-old French economy minister invokes the former British Labour prime minister to describe what he wants to achieve with an omnibus reform bill he’ll present to President Francois Hollande’s cabinet tomorrow aimed at reviving the nation’s stalled economy.

Among his proposals are speeding up settlement of disputed firings, removing the threat of prison to bosses who breach labor laws, shaking up professions such as notaries and easing restrictions on Sunday store openings. Macron sees his plan as a significant turning point for French Socialists, not unlike that made by Blair when he asked that Britain’s Labour Party to drop a commitment to nationalize industry known as Clause IV. The 1995 move let Blair position himself as business friendly and helped him win power two years later.

“This is like a Clause IV moment,” Macron told a small group of journalists last month. “By the time Tony Blair pushed the change through few people really believed in nationalization. But it was symbolic; it demonstrated how things had changed.”

The change -- and its desired impact -- can’t come soon enough for Hollande, who’s mindful that the clock is ticking on his mandate and that France’s European partners want more done to bolster the nation’s growth potential.

With the French economy forecast to expand less than 0.5 percent for a third year running, German Chancellor Angela Merkel sharpened her criticism of Hollande’s economic policy this week.

Not Enough

The European Commission “has made clear that what’s on the table isn’t enough,” Merkel said in an interview published in Welt am Sonntag newspaper, referring to France and Italy. “I would subscribe to that view.”

The Brussels-based commission has given France and Italy until March to show they are living up to commitments to trim their deficits and spur growth.

“We welcome the commitments of France to address the structural weaknesses of the economy and encourage the implementation of the ambitious and wide-ranging reform agenda,” euro area finance ministers said yesterday in a statement.

For Hollande, France’s domestic political calendar is almost as important. With less than half his mandate to run until the general election in April 2017, next year will represent the president’s final chance to push through tough economic measures before shifting into a mode that will require wooing his Socialist base.

Key Year

“2015 is going to be key year for the French economy,” said Francois Cabau, an economist at Barclays Plc in London. “After that the government will be much more focused on the elections and much less inclined to push real reform. It’s now that the moment needs to be created.”

Macron’s Blairist leaning finds support with Hollande’s Prime Minister Manuel Valls. In a Sud Ouest newspaper interview in 2009, alluding to the possibility of a Socialist victory in France in 2012, Valls said, “Tony Blair revolutionized the Labor Party in three years and he won. We can do the same if we are really determined. My mission, which is not just mine alone but rather a collective movement, is to rebuild the left.”

Yet in some ways the French government isn’t entirely following Blair’s template. Macron’s law avoids tackling Socialist shibboleths such as France’s 35-hour work-week or the minimum wage.

Nevertheless the proposals are significant, Cabau says.

Big Step

“This won’t be a revolution but it’s a step in the right direction,” he said. “It’s comprehensive, it marks a significant change in tone and above all, it’s already on the table.”

Importantly, Blair also inherited an economy on the cusp of a long boom, whereas Hollande came into power in the wake of Europe’s sovereign debt crisis -- an episode that left France with record debt and little growth.

And for many French Socialists, Macron and Hollande are already going too far. Paris Mayor Anne Hidalgo has indicated she’s not keen to allow the city’s flagship department stores to open on Sundays. Jean-Luc Melenchon, leader of the Left Front in the 2012 election, also decried the plan, calling for the population to unite against it.

“The law will touch many areas,” so many “that it is the type of trigger that can unite opponents,” he said last week on France 2 television. “Sunday work amounts to over-exploitation, not only of individuals but of society as a whole.”

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE