The former French Minister of Economy, Emmanuel Macron, is going to run for president in the French elections in April 2017. In late August 2016, he had resigned in order to focus on his independent presidential bid. The former banker is not only fairly popular, but also known for his fearless reforms regarding economic liberalism, or at least what is called “economic liberalism” in France. Can he reverse the deadly spiral of deficit spending and tackle entitlement reform?
In August 2014, the government reshuffle of Prime Minister Manuel Valls, desired by president Hollande, was supposed to evict the remaining hardcore socialist members of the government. Minister of the Economy Arnaud Montebourg, known for his radical views, especially those regarding opposing globalisation, was replaced by a young and ambitious high-ranking government advisor: Emmanuel Macron (38), known as the “anti-Montebourg”, would become the youngest member of the French executive in over 50 years. Being a former associate of the investment bank Rothschild & Cie, Macron is one of the few ministers with long-term experience in the private sector.
Major legislative changes in France are appropriated to the initiator of the law. Macron’s law (officially: Law for growth, effectiveness and equality of economic opportunities) contained a myriad of changes to legislation regarding Economic law, Labour law and Transport law. Macron opened up the intercity bus market, a measure that created competition on the market, lowered transportation costs and created 13,000 private sector jobs.
Among all the measures that Macron’s Law contains, two were most controversial and ended up defining his two years in the French government.
For one, there was the reform of labour regulations regarding work on Sundays. Macron not only extended the exceptions made to allow businesses to open on Sundays, but also increased the total number of permits granted by local authorities. The second measure intended to induce flexibility into the profession of notaries, most importantly through creating 247 zones throughout France, in which notaries don’t have to be sworn in by the government and can freely exercise their profession. This basically liberalises the notary market.
Reasons to be optimistic
A young, skilled and fearless independent politician with an appreciation for free markets, what’s not to like? The liberalisations of Macron’s Law turned out to be beneficial for market competition and offer: since the opening of the intercity bus-market began, the number of passengers using buses has multiplied by 7. With bus tickets only half the price of conventional train tickets, companies such as Flixbus, Ouibus, Isilines or Megabus have flooded the market with interesting offers for consumers. The real and tangible effect of this freeing of the market is pushing conservatives and independents further towards a laissez-faire attitude.
According to the latest polls, the former Minister of Economy would not qualify for the second round of the presidential elections, but would considerably shake things up by drawing from socialists, republicans and the far-right of Marine Le Pen.
Emmanuel Macron’s image of fiscal conservatism and social liberalism is appealing to many voters who feel disenfranchised after decades of flat-out failures by both major parties, and in fear of the unknown that is the radical National Front. As a former Minister for the socialist party (who was chosen for his political insight and ambition), Macron lends a voice of reason to the left, all while pushing towards economic liberalism. Macron could become an important asset for free markets in upcoming administrations.
Reasons to be pessimistic
Even though some voters might come around to the advantages of liberalisation, let’s not forget that thousands of people protested Macron’s Law all throughout, with massive strikes even including certain parts of the judiciary. His law ended up splitting the socialist majority in parliament, so that prime minister Manuel Valls had to trigger article 49 paragraph 3, allowing him to pass a bill without the approval of the house, as long as the National Assembly does not pass a vote of no-confidence. Needless to say, Macron triggered a major uproar in his very own majority, which they prefer not to repeat.
France has lost its way when it comes to idealism: with the end of Charles De Gaulle, the dream of a charismatic leader, guiding the country in the right direction, is Utopian at best. The last three presidents embodied political frustration: the unpopularity and inability to act of the incumbent president is not really his terrible fate, it has become the underlying trademark of the job.
The bottom line is this: no politician can undergo the necessary changes if the people don’t change their mind on the role of government. Deficit spending can only be reduced once people consider social services to be their own responsibility, not the one of the taxpayer. If the French public is unwilling to reconsider the size of government, then the upcoming of politicians like Macron will only be sporadic. They will make a step forward, but their successors will make three steps back.
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