New year, same old issues as Macron pursues reform agenda and French unions push for war

A Super-Etendard jet-fighter on the deck of France’s nuclear-powered aircraft carrier Charles de Gaulle in November 2015

New year, same old issues. France’s president promised on new year’s eve that he would go ahead with plans to reform the pension system and the unions bristled and said they would continue with the strikes that now enter their fifth week.

The wave of street protests are exceedingly strange. For starters, they began with more than 30 unions mobilising to register their opposition to – something that hadn’t yet happened.

The unions were protesting against a plan for a plan.

Mr Macron’s administration has been discussing a plan with the other political parties. And the plan is to have a plan to streamline France’s complicated pension system with its 42 different regimes.

As part of the plan for a plan, no one would become poorer or anything. In fact, Macron’s administration has gone to considerable lengths to reassure everyone that the plan for a plan would not leave pensioners worse-off. The only mildly concerning matter for some sections of the French workforce might be a slightly later retirement – up from say, 62 to 64.

How bad can that be when 50 is the new 40?

But then you have those hundreds of thousands of people on the streets of various French cities, disrupting transport networks – trains, planes – opera performances, forcing the closure of the Eiffel Tower. What’s that about?

Actually, it seems to be an attempt by the unions to show that they still have clout. They want to show that the left can still bring people on to the streets. With Mr Macron’s En Marche party having shattered the hold of both the centre-right and the left, the unions are anxious to be seen as charismatic.

Meanwhile, for a bit more context on Mr Macron’s reform agenda, I urge you to read this truly excellent piece from Bloomberg.

William Horobin has written about the successes and failures of Mr Macron’s reform attempts. The  “reform blitz” was “designed to help labor-intensive manufacturers, like those scattered across western France”, he writes. And there, he says, it’s now cheaper to hire but equally, there is regrettably  slow progress in companies taking advantage of the provisions for training.

Read the whole piece if you can, but here are some of the high points, anyway.

Mr Horobin writes: “Macron’s efforts in France are under scrutiny as a test case of so-called structural reforms, both their impact on growth and whether they come through quick enough to deliver an electoral return during the president’s five-year term. Unlike financial boosts from fiscal and monetary stimulus, they aim to alter the very fabric of an economy by reshaping education and training, and rewriting rules to change the behavior of businesses and individuals. That can mean short-term pain before any payoff, a deterrent for politicians at the whims of the election cycle.”

And he cites Bank of France Governor and ECB Governing Council member Francois Villeroy de Galhau to say that the speed of job creation in France indicates the reforms are having an impact.

And now, French companies such as boat maker Beneteau in Pays de la Loire, are pondering whether to use Mr Macron’s 2018 law on training to create its own centers to equip workers with boatbuilding skills. The company’s human resources head acknowledges to Bloomberg: “The fact that businesses can create their own training center is a magnificent opportunity. We’ve not done it yet, but we are thinking about it.”