UPDATE: FRANCE WATCH: Macron Unveils Key Labour Reform Plan

--Adds Detail on Specific Measures

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 decree without the usual

parliamentary debate, will give French employers more power to negotiate

directly with staff, cap damages that labour courts can award for wrongful

dismissal and make it easier for multinationals to shut down loss-making

operations in France. 

     Specifically, the new law will allow companies with less than 50 employees

to negotiate working conditions without unions, while larger companies will able

to cut specific deals with unions rather than being subject to

industrial-sector-wide agreements. 

     "We are offering companies simplicity," Philippe said. "And with this

simplicity there is a visibility which should be favourable for investment." 

     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 the far left, which are

calling for nationwide street protests 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 Sep 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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