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The French Dispatch - A newsletter from Paris

Until now, it seems to work out​

''A relative majority will not be synonymous of relative action nor a sign of impotence.”

Prime Minister Elisabeth Borne said to the newly formed National Assembly following the parliamentary elections that led to a hung Parliament last June. Her speech echoed France’s catch-22: continuing the reform path impelled by Emmanuel Macron in 2017 whilst securing the moulding of much necessary compromises.​

The course set by the French Prime Minister was clear: create the financial leeway needed to invest in critical sectors, strengthen France’s industrial and digital footprint, and achieve the ambitious goals that France and Europe have set for themselves, in the context of the environmental and energy transition bearing in mind social equity concerns.​

Whilst Macron’s ambitions haven’t changed, his ability to materialise them surely weakened. With a relative majority, where the behaviour of the opposition and the various components of the Presidential majority (divided between Renaissance, Horizons, MoDem, Parti Radical, En Commun! and Fédération Progressiste) are unpredictable, surprises and tight votes are now commonplace within the French Parliament. To be sure, some decisions, at a local and regional level, can occur on a non-partisan basis, with alliances across parties depending on the local stakes. ​

“With a relative ​majority, where ​the behaviour of ​the opposition ​and the various ​components of the majority are ​unpredictable, ​surprises and tight ​Votes are now ​Commonplace within the French Parliament.”

Despite the odds, it can be a functional legislative term​

This past summer set the tone for the new term from two standpoints: 1) it showcased the ability of the government to convince and strike the necessary compromises to legislate, 2) it saw a new conservatives-presidential majority axis emerge. ​

This summer’s adoption of the bill on purchasing power demonstrated the ability of the Government to reach​ middle-grounds to legislate. Interestingly, France is witnessing the return of the traditional left-right divide, mostly illustrated during the debates on salaries and bonuses. Conservatives MPs backed the purchasing power bill in exchange for the adoption of some of their proposals, such as a tax exemption for overtime work and an additional governmental effort on fuel price.

As expected, the far-left coalition Nupes (”Nouvelle Union Populaire Ecologique et Sociale”), despite showing some signs of internal dissensions, demonstrated powerful dissent to the government during debates and votes. The far-right, on the other hand, is on a rekindling image mission to tackle concerns on its ability to govern one day. As part of its quest to soften its image and be perceived as a constructive player, its MPs supported the vote of a left-alliance Nupes’ amendment to limit rents increases in rural areas, which led to its adoption by a tight margin.​

However, bills in the Parliament were not the only issues discussed throughout summer. France witnessed very high temperatures and unprecedented drought. In August, waves of gigantic fires, came as an eye opener of the outmost need to accelerate environmental transition and adapt the country to looming future developments due to climate change. Consequently, the French Government announced that considerations about the ecological transition would be a central criterion for the government’s investment policy. Released in mid-August, the bill on the acceleration on renewable energies, which provides for a simplification of administrative procedures to shorten wind and solar energy projects’ deployment, will be one of Fall’s main legislative challenge. It has been presented at the end of September in the Council of Ministers, ahead of its debate in Parliament.

A new modus operandi: lessons learned from the yellow vest movement? ​

Criticised for his “vertical” practice of power, Macron promised during the presidential campaign a more inclusive approach to policymaking. This is the objective of the “National Refoundation Council” (CNR), launched in early September. It gathers a wide array of stakeholders, from political parties, unions, business representatives, and NGOs around several major themes of reflection, including full employment and industrialization, school, health, "aging well" and ecological transition. Despite scepticism raised by oppositions, this new mode of governance is a statement of Macron’s will to change modus operandi, ​moving away from the top-down historical French government’s approach, to one of compromise and dialogue.

“Criticised for his vertical practice of power, Macron ​promised during the ​presidential campaign a more inclusive approach to ​policymaking. ​This is the objective of the National Refoundation Council​ (CNR), launched in early September.”

What’s keeping France awake at night? ​

The long-awaited pension reform is clearly on top of the agenda and has turned in a real brainteaser. During the presidential campaign, President Macron promised to gradually raise the legal retirement age from 62 to 65. This measure has not been well received by the public, particularly by that part of the population that started working at a young age or is practicing physically demanding jobs. Nonetheless, the French Government has made the pension reform one of its outmost priorities, even more so as the economic outlook has taken a hit and France’s public finances with it. The government sees this reform as a crucial step in opening up new rights (minimum pension of €1,100 for a person who has worked all his life) and in consolidating Paris' credibility on financial markets.​

The debate surrounding a windfall tax on energy companies and some major transport companies is keeping the political ecosystem busy. Whilst Emmanuel Macron and Bruno Le Maire have expressed a clear refusal to tax “superprofits”, this is THE issue that the left intends to put at the centre of the debate this autumn, during the discussions surrounding the 2023 finance bill. The Nupes MPs intend to unite to get their initiative passed. As such, the amendment proposed this summer during the review of the rectifying finance bill will be reintroduced as is by the left, in the hopes of fetching the ten votes that were lacking back in July. ​

A brief overview of what has been voted ​

Since the parliamentary elections in June, five laws were voted by the French Parliament:​

  • The Law of July 30, 2022, putting an end to the Covid state of emergency.​

  • The Law of August 5, 2022, authorizing the ratification of the Protocols of accession of Finland and Sweden to the NATO.​

  • The Law of August 16, 2022, on the prevention of the publication of terrorist content online.​

  • The Law of August 16, 2022, on amending the budget for 2022.​

  • The Law of August 16, 2022, on emergency measures to protect purchasing power. ​

A hectic 2022 Autumn ​in France​

The forthcoming challenges for the executive and the political establishment​

Emmanuel Macron and the French Executive under pressure. ​

Given the absence of a clear majority, which has led to an unprecedented and hectic political context, Emmanuel Macron and his Prime minister Elisabeth Borne, will face hurdles to tackle the up-coming challenges:​

1. Alleviate the effects of the energy crisis,​

2. Negotiate with hostile oppositions over the 2023 finance bill,​

3. Try to pass a plan for raising the state retirement age, as well as a bill intended at tightening conditions for unemployment benefits.​

The executive has also launched a six-month public consultation on assisted dying. To overcome oppositions on this bill, President Macron bets on surfing a favourable public opinion to change law. This bill is also an occasion for the executive to provide guarantees to the left-leaning factions of the National Assembly as well as to the social democratic or centre-left supporters of the presidential majority.​

The oppositions​

Party politics is currently taking hostage the opposition parties. The left is threatening a “running battle” for lower prices and higher wages, with pledges of street marches and strikes. First of which have been held on the 29th of September, emerging as the first real social test for the Government. The wide left-wing political alliance is also stuck in gender violence scandals, adding fuel to arguments that the left has fumbled or ignored cases where prominent men in their ranks are accused of harming or harassing women.​

The conservative party, Les Républicains (LR), is in the process of choosing a new leader. The implications of this internal election​ are great: since Macron and his allies lost their overall majority in the National Assembly in June, the 62 LR MPs hold the balance​ of power. Should the newly elected President of Les Républicains decide to stop supporting Macron’s policies, it will be difficult for Macron and Borne to govern at all.​​

The National Rally on its end is completing its migration from political mavericks to respectable party of government. The party is also launching a leadership battle for a new party president. Jordan Bardella, skilful media performer, current interim president of the National Rally and close to Marine Le Pen, is the favourite of this election. ​

The budget hurdles​​

Since the beginning of parliamentary democracies, the vote over State budget has been defining majorities and oppositions. Yet, over the past years, the executive had a clear Parliamentary majority, easing Budget adoption. ​

This year, it will certainly be different. Last general elections provided France with a hung Parliament. The Government will therefore struggle to get a majority and will be required to face a motion of censure for the budget to be approved. Although it is likely for the budget to be approved following this procedure, the exercise will undoubtedly spark high controversies and foster instability in the French political realm. ​

Beside drawing the line between the majority and the opposition, the vote of the budget is also a time where political priorities are being concretely reflected. For the 2023 budget, three priorities have been already secured by the French Government:​

“Since the beginning of parliamentary democracies, the vote over State budget has been defining ​Majorities and ​oppositions. Yet, over the past years, the executive had a clear Parliamentary majority, easing Budget adoption. ​This year, it will ​certainly be different”​

  • Compared to the initial expectations, the 2023 State budget will grow by € 10 billion, underlining the commitment of the Government to support the economy amid rising inflation. ​

  • The budget dedicated to the energy transition will be increased by € 6,6 billion mirroring the willingness of the executive to bolster the development of renewable and nuclear energy facilities. ​

  • Amid the uncertainty caused in Europe and beyond, the government will invest 43.9 billion euros to the Ministry of Defense, an increase of 3 billion euros.​

3 Questions to Frédéric Dabi, Managing Director of Opinion at Ifop​

1. Five months after the re-election of Emmanuel Macron, how do the French people view his action? Does he have the necessary support to carry out reforms such as unemployment insurance and pensions?​

The French people's assessment of the re-elected President is both a continuity and a break in comparison with the first five years.​

Continuity as Emmanuel Macron still benefits from a logic of exoneration from his difficulties ("he is doing his best in the face of successive crises") and of distinction from his opponents ("neither Marine Le Pen nor Jean-Luc Mélenchon would do better than him").​

However, reflecting a presidential campaign in which the outgoing candidate had little involvement and disappointing​ parliamentary elections, the unprecedented criticisms in terms of inaction (“nothing is happening in this new mandate”) and lack of direction (“where is the President taking us?”) are becoming structural.​

In this context, the implementation of a pension reform, despite its perilous nature in the face of a majority hostile opinion, constitutes a weapon of destruction allowing to neutralise these criticisms.

2. French people's concern for the environment has increased sharply after a summer marked by several heat waves and major fires. Is this just a flash in the pan or is there a strong trend?​

The perception of the fight against climate change as an absolute priority has never been so high among the French in the hierarchy of issues that count in their daily lives.​

The terrible summer that has just passed has only strengthened this perception. But the summer weather events have had the effect of spectacularly homogenizing feelings between the generations. Never has the urgency to act on climate change been so widely shared at both ends of the age spectrum. ​

“The perception of the fight against climate change as an absolute priority has never been so high among the French in the ​hierarchy of issues that count in their daily lives.”

Nevertheless, the inflationary context and the energy crisis have exacerbated the obsession with purchasing power and thus the "battle of Hernani" whereby the end of the world and the end of the month should not be contrasted.​

The persistence of this opposition can only slow down (temporarily?) the appropriation of the climate emergency by the country as a whole and, above all, the acceptability of public policies in this area by individuals.​

3. Beyond the awareness of the issues related to climate change, are the French ready to change their lifestyle to reduce their carbon footprint? What efforts are they willing to make and under what conditions?​

I think that French people are ready to change their behaviour, especially since, for many, the logic of small individual gestures tends to replace the failure of collective organisations, such as public authorities. A survey conducted by IFOP and French NGO “Agir pour l’environnement”, in January, revealed that most French people were systematically in favour of taking certain actions to make the planet more liveable. Echoing the energy crisis, 80% of those interviewed said they were willing to turn down the heating in their homes by a few degrees.

Upcoming Milestones​

From late September to December 2022: Review of the finance bill​

  • A challenge: striking a balance between public finances consolidation and support for households’ purchasing power.​

  • A doubt: the debate on pensions reform could become part of the discussions.​

  • A risk: to have any hope of reaching an adoption, the government will have to put itself at risk by engaging its responsibility – with the 49-3 proceeding – and thus face a motion of censure. ​

Early October: Unemployment insurance reform​

  • An objective: resolve the work forces shortage.​​

  • A suggested method: to create a counter-cyclical system with more generous unemployment benefits in times of crisis and lower in periods of prosperity.​

  • A risk: unions are opposed and will try to mobilize workers for demonstrations or strikes. ​

Across the autumn: Thematic “National Council”​

  • An original initiative: will of President Emmanuel Macron to bring together around the table different actors of the public debate (opposition parties, unions, associations of elected officials, NGOs…) to move forward on several conflicting issues.​

  • Several subjects: Health, School, Labour, Unemployment insurance, Ecological planning.​

  • Uncertainty: the result of this initiative remains uncertain. The discussion could lead to proposals, submitted to the Parliament, or put to referendum. ​

Before Dec. 2022: Renewable Energy bill​

  • An objective: cutting re-tape that slows down the development of renewable energy.​​

  • An opportunity: to cope with the tensions generated by the installation of renewable energy, desire to innovate on the sharing of the value generated between the different actors impacted (companies, local authorities, citizens).​

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