Monday, June 19, 2017
A Centrist Blowout in France: What is Next?
So what comes next for President Macron and his large Assembly majority? The first clear priority will be labor reform. France has a traditionally inflexible labor law in which large labor unions negotiate wages and conditions for an entire sector of the the economy. This means that a brand new start up is stuck with the deal negotiated with its dominant competitors. This is in contrast to the German and Scandinavian (and US model) where labor negotiations are done on a company-by-company model. Macron want to move to the German and Scandinavian model. He is already in negotiations with the major French labor unions, and the large majority will give him leverage to move in this direction--particularly since some French unions favor this new model. Nonetheless, expect a season of strikes on this issue. Macron's success in the elections, however, will help him weather the inevitable strikes and street demonstrations.
Other reforms include an attention to the French budget (some cuts and tax cuts are likely in the works), while some enhancements to some social services.
Longer on the horizon, Macron wants to reform the EU itself. This will include proposals that have met with significant German resistance in the past--such as a common budget and a common Finance Minister--and will require success on the domestic front first.
Probably the most interesting question is whether we could ever see such a political revolution in the United States. I think not. There are numerous features in the French political systems that helped pushed this result: a Parliamentary system that has long had more than two parties, and the use of a runoff system that allowed Macron to turn 40% support in the voting public into 60% share of the Assembly. Finally, this result would never have happened with the extraordinary (and surprising) political talent of Emmanuel Macron himself.
What do you think?