What Happened
Right now, Emmanuel Macron faces one of the most important tests of his presidency. Hundreds of thousands of protesters opposing his plan to restructure France’s pension system took to the streets of Paris and other cities across the country Dec. 5. Public sector workers in the transportation, education and other sectors have gone on strike, adding to the disruptions. But although the French government has outlined its plan for pension reform, it hasn't announced details of its implementation. This gives Paris room to adjust its plan to appease angry workers without appearing too weak. But should public resistance force the Elysee to abandon pension reform altogether, Macron's authority, both domestically and at the EU level, would suffer a blow. This would make it more difficult for the government to push for future domestic and economic reforms, either at home or abroad.
Because the Elysee still has the option to tweak its pension plan and delay implementation to appease detractors, it seems unlikely at present that the government will abandon the push. But if the adjustments fail to calm social unrest and Paris is forced to change course entirely, it will pay a high price, both domestically and within Europe.
Why It Matters
Macron wants to replace France’s more than 40 different public pension systems with a single, simplified system. But this involves eliminating special benefits that some activities and professions, from sailors to train drivers, have accrued. And while the proposed unified plan does not officially change the retirement age, 62, it offers incentives for people to delay retirement and continue to work.
Macron’s En Marche party controls a comfortable majority of seats in the National Assembly, which means that from a legislative perspective, the reform proposal would most likely win approval. The main threat to reform comes from the streets. Some labor unions have promised to continue strikes and demonstrations for weeks if need be (an additional public transportation worker strike has already been announced for Dec. 6). The French government already had been discussing the reforms with unions and business groups for months, and Prime Minister Edouard Philippe is expected to present their full details in a speech next week. This would allow the Elysee to introduce last-minute changes and still present the plan as a compromise and not as a defeat.
Background
Since taking office in May 2017, Macron has sought to reform the French economy to make it more competitive and attractive to foreign investors. But many of his reforms have been unpopular. The "yellow vest" movement — with associated, sometimes violent, social unrest — got its start in late 2018 in the wake of an unpopular fuel tax hike. Subsequently, Paris lowered some taxes, increased public spending and slowed the pace of economic reform (the current pension reform was originally slated to have been presented months ago). Macron’s plans also have a European dimension, as Paris sees domestic economic reform as a way to prove the government’s reformist credentials and elevate France’s role in EU affairs. The timing has become particularly crucial for France: Germany, Italy and Spain each face domestic political uncertainty, and the United Kingdom is on its way out of the EU, leaving the door open for France, the only major EU country with political stability and a decisive push for economic reform, to become Europe’s leading voice. But the current protests could derail its opportunity.
