Teneo logo

June 23, 2020

FRANCE: Macron’s ‘phase III’

BY Antonio Barroso

Share on twitter
Share on whatsapp
Share on facebook
Share on linkedin
Share on email
Share on reddit

Listen to our reports with a personalized podcasts through your Amazon Alexa or Apple devices audio translated into several languages

( 3 mins)

President Emmanuel Macron is expected to reshuffle his government after the second round of the municipal elections taking place this Sunday, 28 June. It is unclear whether he will retain Prime Minister Edouard Philippe, whose popularity has received a boost due to his management of the Covid-19 pandemic. Regardless of Macron’s decision, the president is unlikely to alter the direction of his policies, but gradual changes in areas such as pensions are more likely than sweeping reforms in the coming months. On the political front, Macron could be tempted to call a referendum on green policies to boost his environmentalist credentials.

As explained in previous notes, the ruling Republic on the Move (LREM) party will perform poorly in this Sunday’s vote. This is due to the incumbency advantage of established parties and LREM’s lack of established local networks. The cabinet reshuffle expected after Sunday’s vote will mark the start of what has been called ‘phase III’ of Macron’s presidential term, basically the last period before the 2022 spring presidential election.

Macron has given no indications about which ministers will continue to hold their post, but the recent boost in Edouard Philippe’s ratings creates a headache for the president. Philippe remains quite popular with center-right voters, which have increasingly become part of the president’s support base. But Macron might have an incentive to appoint someone more firmly anchored in the center and with a limited ability to steal the limelight from him in the run-up to the 2022 presidential contest.

Back to the future

Regardless of the composition of the new cabinet, the substance of Macron’s economic policies is unlikely to change much. The president will continue to use the Covid-19 shock to push for his long-term strategic goals, such as stepping up industrial policy. For instance, the government’s sizable support package for the automobile industry includes commitments by firms to re-shore part of their production to France, as well as funds for research into self-driving cars and hydrogen power.

Less clear is the fate of Macron’s controversial changes to the country’s pension system. The National Assembly passed the reform in its first reading in March, but the Covid-19 pandemic put the policy changes on hold. The president is allegedly considering reviving the draft bill so the reform can be implemented before the end of the term. But the trade unions – including the reformist French Democratic Confederation of Labor – do not seem receptive to the idea. A potential compromise could be to maintain the core elements of the reform (i.e., replacing the existing 42 schemes with a single points-based system) while being less aggressive on the funding front (i.e., not cutting benefits or hiking social contributions). In any case, the reform is unlikely to survive in its current form.

Macron is also reportedly considering the organization of a referendum on green policies that would include measures proposed by the so-called Citizens Convention for Ecological Transition – an initiative launched by the president in reaction to the Yellow Vests protests. As previously explained, the risk of such a vote is that it could become a plebiscite on Macron. On the other hand, a multiple-choice ballot on specific policy issues would reduce such risk, while helping Macron to diffuse the political cost of implementing new green policies.

More by

FRANCE: The right fights, Macron benefits?

( 3 mins) The members of the center-right party The Republicans (LR) agreed on 25 September that their presidential candidate would be elected in an internal ballot on 4 December. While the decision could help the candidacy of

Read More »

FRANCE: State of the presidential race

( 4 mins) With around 200 days to go to the 2022 presidential election, no credible challenger to the Emmanuel Macron-Marine Le Pen duopoly has yet emerged. The key factor to watch remains whether the center-right can rally

Read More »