France is in trouble

I am beginning to despair of France. Because here is the simple truth: Emmanuel Macron is right and the unions are wrong. If France is not reformed during what remains of the President’s five-year mandate, exactly the same problems will be bequeathed to his successor that were passed to him by a succession of failed presidents – beginning with Jacques Chirac, continuing with Nicolas Sarkozy and ending, ignominiously, with François Hollande.

Macron has made mistakes. He is a vain and arrogant man who assumes against the evidence that anyone who hears him speak must be convinced of the truth of his words. He is also not the master politician that he appeared to be when he arose like Jupiter ex machina onto the national stage in 2017. If he has learned anything in the last 12 months it will have been that he needs to take a far wider range of views into account before he embarks on a controversial reform that is sure to end in confrontation. The leader who doesn’t anticipate events is bound to end up surprised.

But if we look at the response of the French to everything Macron has attempted since he first entered the Élysée Palace, the axiom that comes to mind is that to which I first drew the attention of Reaction readers in 2016: the French will only accept change on the clear understanding that everything remains the same.

The practical application of this adage has been evident throughout the most recent disturbances on the streets of Paris and the country’s provincial cities. It is not the gilets-jaunes this time. They are standing on the sidelines to give space to the trade unions and the Far Left, which have combined to oppose Macron’s “outrageous” attempt to reform the state pension scheme by introducing order into chaos.

If you were to listen to Philippe Martinez, general-secretary of the CGT union, representing the nation’s rail workers, Macron pulled a fast one when he came up, out of the blue, with his plan to rationalise the sector’s notoriously profligate and labyrinthine pension arrangements. According to Martinez, Macron got himself elected on a promise to leave pension provision more or less as it is today, with a total of 42 different schemes providing a range of entitlements, centred on short hours and early retirement.

The reality is that the present system – widely perceived as the birthright of every French citizen – can no longer be afforded. At a time of continued high unemployment and with an ageing population, the state share of the annual deficit on pension provision is expected to hit €19 billion by 2025. Just 17.5 million workers are supporting the pensions of 14 million retirees.

But is Macron guilty of deception? Here is what his programme for government, published in advance of his presidential run in the spring of 2017, had to say on the subject.

“Our system will remain based on distribution, which is the other name for solidarity between the generations. It will remain collective and united. It will continue to take into account the diversity of careers, some of which are longer or more arduous than others. It will preserve benefits, such as those related to maternity leave. But it will do so in a more transparent and fairer way.

“We will create a universal pension system in which each euro paid in gives the same rights, regardless of when it was paid and without regard to the status of the contributor. All social systems will be grouped into one, common to employees, employers and the self-employed, offering the same rights and obligations to everyone.

“The total accumulated benefits will be converted at retirement into a pension, using a conversion coefficient based on the age at retirement and the year of birth. The increase in life expectancy is therefore taken into account continuously over the generations, obviating the need for successive reforms, which change the rules and are anxiety-provoking and a source of uncertainty. Over time, the reform will indeed have a financial effect by guaranteeing a long-term balance.

“This reform will not change anything in the retirement conditions for those who are less than five years away from retirement and who have therefore already planned for it. For the others, those who have at least five years of activity in front of them, the transition will be gradual, over a period of about 10 years.”

How much more specific could Macron have been? Bear in mind, he won a landslide victory in 2017. Either the French weren’t listening or else they thought the thrusting young investment banker seeking their vote was just another Pretender to the throne – like Chirac, like Sarkozy, like Hollande ­– whose promises of reform were so much empty air, devoid of all weight, like confetti at a wedding.

And of course they could be right.  Macron let it be known last week that if he was forced to abandon pension reform, he would not seek a second term. Many in the country would be delighted if this turned out to be the case. The Left, the unions and the populists of the gilet jaune movement long ago dismissed him as the President for the Rich. But if he does give up the fight – which I don’t believe he will – and returns to the greater innocence of making money, it will be the French who will be the real losers.

France simply cannot go on living beyond its means. It is one thing for the “people” to go on collecting the scalps of their elected leaders, almost as if this was the whole point of the democratic exercise. It is quite another to believe that they can do so in perpetuity without ever having to count the cost.