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France: Macron Imposes Labor Reform

Friday, September 1st, 2017 | World News

It is the first part of Macron's great reform puzzle: after weeks of secrecy, France's government reveals the details of its labor reform. Is the government facing a hot autumn?

The effort is high – so high that France's President Emmanuel Macron himself is in the ring. Just on the day when the Paris government presents its controversial reform of the labor market, the Social Democrat defends his course in a 16-page interview. "You have to face things," he says in the magazine "Le Point". "We are the only major economy in the European Union that has not been able to overcome mass unemployment for more than three decades."

Since his election, Macron had mostly avoided journalist questions on domestic politics. But now the President, who has been crashed into polls, has realized that he has to come out of the cover. A change in employment law is his big fire test. The first economic policy project has to go smoothly – otherwise the ambitious reformagenda, with which Macron wants to give new impetus to the French economy, was only a few months after its entry into the Élyséepalast.

What Prime Minister Edouard Philippe presented on Thursday under the title "Strengthening the Social Dialogue" is not a cardboard stalk. "This is already a deep cut in the current labor legislation in France," says Jens Althoff, head of the Paris office of the Heinrich Böll Foundation. "There are some bitter pills for the workers." The French Linkspartei already complains about an "attack on labor law", which makes working conditions more precarious.

The French labor law, which is frequently criticized as being rigid, is to become more flexible according to the plans. In particular, small and medium-sized enterprises should be able to adapt better to their respective situations. The reform strengthens the role of industry and enterprise agreements: Employers and employees should be able to negotiate directly details of working conditions such as premiums. In small companies with fewer than 50 employees, the trade unions can be left out. "This disempowerment of trade unions is a very clear change of course," says Jens Althoff.

 Fight against high unemployment
The reform partly also relaxes the protection of the protection. Compensation for unjustified redundancies is capped: A working court can award a maximum of ten monthly salaries to an employee who has worked for ten years at a company. So far there is a lot of difference in the legal case. In return, the severance payments increase in the case of legal redundancies.

The government calls for a "balanced" reform. It hopes that companies with the new rules are more willing to hire additional employees. France has been suffering from high unemployment for years, according to Eurostat, lastly at 9.8 per cent, more than twice as high as in Germany.

  Among the young people, 23.4 percent are looking for a job. "The French system very well protects the 'insiders' who benefit from a stable contract, but at the price of the total exclusion of the youngest, the least qualified," argues Macron.

While trade associations positively assess the reform, the trade unions criticize criticism. Even the moderate CFDT shows disappointment: "Dogmatism" has prevailed on some topics, says chairman Laurent Berger.

Intensive dialogue seems to pay off
However, a broad front has not yet been shown – only the left CGT protests for the 12th September have been announced by the largest trade unions. "All our fears have been confirmed", says their ardent chief Philippe Martinez.

The Force Ouvrière trade union, last year in the first row against a reform of the labor market of the previous government, is more differentiated. It points out that the government has in some cases heard about the trade unions. It is possible, therefore, that the strategy of the intensive dialogue which the Minister of Labor has had with employers' organizations and trade unions in recent weeks pays off.

The prospects of stopping the project are anyway mau. Parliament has given the government a sort of power to simply enact the reform with the five regulations now presented. They are to be adopted as early as September 22nd – Prime Minister Edouard Philippe already makes it clear that there should be little changes until then.

The Parliament, in which Macron knows a clear majority, is then only flat-rate on whether the reform will become a law. The "method with the Berchstange", calls the Althoff. "I do not think this will increase the acceptance of the reforms."

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