FRANCE WATCH: Macron Unveils Key Labour Reform Measures

--PM Philippe Says Plan 'Ambitious, Balanced and Fair" 

By Jack Duffy

     PARIS (MNI) - The French government unveiled its long-awaited labour reform

plan on Thursday, in what is widely seen as a crucial test of President Emmanuel

Macron's ability to modernize the Eurozone's second largest economy.

     Prime Minister Edouard Philippe told a press conference in Paris that the

proposed reforms were "ambitious, balanced and fair." He said that "no one can

argue today that our [current] law promotes hiring, protects effectively and

helps business development."

     The reform measures, which will be adopted by degree without the usual

parliamentary debate, will give French employers more power to negotiate

directly with staff over working hours and pay, cap severance awards and

generally make it less costly to hire and fire.

     Specifically, the measures will shift the focus on French labour relations

from business sectors to the company itself and make it easier for firms with

less than 50 employees to expand without being subject to new regulatory

burdens. 

     The measures are seen as an antidote to France's chronically high

unemployment rate, which at 9.5% is roughly double that of Germany and the UK.

Successful domestic reforms are also seen as a proving ground for Macron to push

for broader reforms in the Eurozone. 

     "This labour law will be the cursor of Emmanuel Macron's mandate and his

willingness to really reform," Pierre Gattaz, head of the French employers group

Medef, told the group's annual summer congress on Tuesday.  

     With Macron commanding an absolute majority in Parliament, the real test

for the reforms will come from France's unions and far left, which are calling

for nationwide street protest in September.

     French citizens must resist "this social coup d'etat which is being

organized against them," said Jean-Luc Melenchon, leader of the far-left France

Unbowed party, who has called for protests on Sep 23. 

     Unions appear divided, however. France's third largest union, Force

Ouvriere said Wednesday it would not join the far-left CGT union in nationwide

protests called for Sept. 12. The country's largest union, the CFDT, will also

not join the protests.

     Voters also appear ambivalent about the reforms. A poll by the Elabe

polling group released Wednesday showed that only 40% of those surveyed were in

favour of major changes in France 3,000-page labour code.

--MNI Paris Bureau; tel: +33 1-42-71-55-41; email: jack.duffy@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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