The end of leisure in France?

A government grappling with low growth and unemployment wants to ring in a longer work week, amid protests

France is facing a budget deficit of more than 4.5 per cent. The EU has given France a two-year deadline to reduce its current deficit to the EU’s acceptable deficit limit of 3 per cent.

To appear pro-business and to tackle this budget deficit, President François Hollande and Prime Minister Manuel Valls introduced a draft law on growth, activity and equality of economic opportunity in the French parliament in February.

Known as ‘la loi Macron’ — after Emmanuel Macron, a former Rothschild banker who is now the minister for the economy, industry and the digital sector — it allows for shops to remain open on 12 Sundays out of 52, as compared to the earlier 5. This has been met with much resistance and public protest in France.

So how exactly does a government undertake the hard path to economic reform?

Pushing an archaic law

Valls has invoked an archaic law, Article 49-3 of the French constitution, to attempt to get ‘la loi Macron’ passed by parliament by mid-July. The Article, called the strongest weapon of the French constitution, has been invoked 84 times since the constitution of France’s Fifth Republic in 1958. This provision enables the prime minister to push one Bill past the National Assembly directly to the Senate unless a motion of no confidence is passed by one-tenth of the members within 24 hours of the Bill being tabled before it goes through. Passing of the no-confidence motion would risk having the government dissolved.

Thankfully, the no-confidence motion was rejected on June 18. The draft bill will now return to the Senate on June 29 before being definitively adopted before July 14.

Will this draft Bill, once adopted, make a difference to the French economy? Is it worthy of being the one Bill the prime minister can push forth?

Some see the use of Article 49-3 as political manoeuvring to enable Valls and Macron to position themselves as the main contenders for the 2017 presidential elections. Opponents of the Bill view it as providing for more state intervention in an economy saddled with red-tapism.

Others view the draft Bill as an effective tool for reform. They argue that it attempts to develop employment and social dialogue, modernise the market for goods and services by unlocking highly regulated sectors, and stimulate investment by simplifying the system.

Proponents of the Bill view it as attempting to create a dynamic industrial policy to finance investment.

Key features of the Bill

The Bill introduces more competition in legal services for jobs such as bailiffs, notaries and court clerks. It opens up inter-city bus routes to allow them to compete with trains.

It sets rules for selling state assets, which might mean the sale of stakes in airports in Nice and Lyon. It regulates how long taxis can wait for their customers outside buildings and airports. It removes the requirement for farmers to employ architects when they make minor changes to their land.

The Bill includes reform measures in favour of employees of small and medium enterprises whose benefits are capped in case of unfair dismissal. It creates tourist zones in which stores would be permitted to trade every Sunday.

It streamlines employment tribunals that make it so difficult and costly to fire anyone in France. And, it aims to make the social and tax regime applicable to free-shares grants more favourable. The Bill grants personal income tax exemptions to expatriates. It introduces a new private equity investment vehicle called the “unregulated partnership company”. Employees are to be allowed greater involvement in their company’s development.

High potential staff is to be recruited in startups and small and medium companies. The Bill proposes to introduce an electronic identity card for companies to facilitate interactions with customers, suppliers and public administration. International investors are ready for the introduction of this Bill. France’s European partners are waiting for France to modernise its economy.

Macron believes this Bill will loosen labour restrictions and boost GDP growth. However, far from allowing 24/7 shopping and scrapping the 35-hour workweek, ‘la loi Macron’ is a modest deregulation Bill that aims to reduce unemployment.

The writer was a lawyer in France and now teaches French in Delhi

Published on June 23, 2015
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