France: Macron’s final battle over pension reform

One could almost think that French President Emmanuel Macron is trying to hide when he flies to Germany for a dinner with Chancellor Olaf Scholz (SPD) during demonstrations against his pension reform on Tuesday. In fact, the international stage has been a refuge for the head of state in recent weeks from the vociferous protests that have hit him across the country.

For the 14th time, the trade unions are mobilizing to protest against the reform decided in mid-April. On Thursday, the opposition will also make a final attempt to stop the project – with its own, little promising draft law that is intended to reverse the increase in the retirement age.

Is Macron rebuilding the government?

Macron was unpopular, rare and weakened after the decision to gradually increase the retirement age from 62 to 64. What’s next for other important projects? And how will the liberal head of state get his hands on the helm again for the four years of government that still lie ahead of him?

In the meantime, there are increasing signals that Macron could try a new start with a government reshuffle and a replacement of Prime Minister Elisabeth Borne. There is always a crunch between Macron and the head of government. In addition to her work craze, what speaks for Borne is that she got the pension reform under adverse circumstances in dry cloths.

With hastily announced rapid improvements in the world of work, education and health care, all of which are permanent construction sites in French politics, Macron had already tried to move away from pension reform to other issues. Tax cuts for people on moderate incomes were announced. Already on the national holiday, July 14th, a balance should be drawn. Meanwhile, Macron is drawing strength from the continuing fall in unemployment and from successful industrial settlements, a spearhead of his policy. His popularity values ​​and those of Borne increase slightly.

Yellow vest protests and Corona prevented earlier reform

The innovator Macron actually put the issue of pensions, which is sensitive in France, on the agenda during his first term in office. After yellow vest protests, however, Corona came and the reform was called off. In the 2022 election campaign, the President announced a second attempt and warned the population that everyone would have to work a little more. With the loss of the absolute majority in the parliamentary elections a year ago, however, the gradual raising of the retirement age from 62 to 64 years became a feat of strength. The support of the conservative Républicains crumbled away. The government punched the reform through parliament without a vote – a Pyrrhic victory.

Military, green industries and immigration on the agenda

In order to prove that he is not trapped in domestic political paralysis and that he still has creative power in France, Macron wants to advance several major legislative projects in the coming months. On the one hand, he wants to drastically increase France’s military spending, from 2024 to 2030 the army’s budget is to increase to 400 billion euros. Broad support is considered certain, and a point of discussion could be how much money goes into which weapon systems.

The second test case for Macron’s reform capability revolves around promoting green industries, from car batteries to heat pumps to solar and wind power, to bolster France’s industrial base. Settlements should be accelerated and facilitated. Discussions could be caused by the fact that the draft law also contains a portion of protectionism. Subsidies for green technologies or purchase premiums for e-cars should be limited to goods whose production complies with EU environmental regulations. This could exclude Chinese products, for example.

The most difficult thing to implement is likely to be the amendment to the Immigration Act. A draft launched in February was shelved, and the Républicains, the only possible supporters of the presidential camp, submitted a counter-proposal that bears more of a right-wing nationalist signature. Compromise lines are not yet apparent. Whether the law can be passed in the fall remains to be seen.

Blockade attitude of the trade unions eased

Between 400,000 and 600,000 demonstrators are expected to attend the nationwide protests against the pension reform, which will come into force in September, on Tuesday, significantly fewer than on the previous day of protests on May 1st. The blocking attitude of the trade unions, which for the first time in years took a joint front against a government project with the pension protests, has now eased again. They have already met the Prime Minister again to discuss other issues.

And as far as the opposition’s parliamentary push against the reform on Thursday is concerned, the government camp has enough leverage to let the request come to nothing.