FOR those seeking evidence that Emmanuel Macron is set on a radical overhaul of the economy, France’s new budget, now being debated in the Senate, offers mixed evidence. For all his bold talk of “transforming” France, some measures—notably on public spending—so far look tentative.
Undoubtedly there has been much to cheer. Mr Macron had already signed off on reforms to boost flexibility in the labour market earlier this autumn. Assessing the full impact of these is tricky, because implementation takes time and an upturn in the economic cycle means unemployment should drift down from 9.7% in any case. A big unknown is whether unions will keep their de facto power to set some national terms on pay and conditions, limiting firms’ flexibility no matter what the laws may say. Economists will be scratching their heads over this for years.
The budget is easier to assess. Two measures stand out. The president talks of a France that encourages wealth creation rather than...Continue reading
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