I'm a fan of Emmanuel Macron, but the French president needs to get real about his nation's economic woes. Absent much bolder action, his approval ratings and political future will continue to plummet.
The concern is newly relevant in light of Macron's recent showdown with a job seeker who complained that he could not find work. Macron responded by telling the man that he should go to an entertainment center in Paris and apply for work as a waiter.
The president's words didn't meet a positive reception in the French press, with many claiming that Macron is arrogant. That reaction is further reflected by Macron's declining approval ratings. Yet Macron's issue isn't that he is doing too much to change France's economy, but rather that he's doing too little. That needs to change. The president retains a vast parliamentary majority and he should be using it to force through vast changes rather than tidbit actions which earn voter ire without producing sufficiently justifying results. The result is a French economy growing at half the pace of the U.S. economy and with unemployment rate twice as high as America's.
Fortunately, Macron has options to right his sinking presidency.
First off, he must go far further in reducing the size of the state. The scale of the problem here is significant: France's tax-to-GDP ratio remains a vast 10 percentage points higher than the OECD average. The OECD also records France as having the highest public employee percentage share of any member nation. Cutting this wasteful spending would create space for private sector investment, much-needed fiscal balance, and allow Macron to enact corporate tax cuts (the key to boosting sustainable employment and economic growth).
Macron should also take a hammer to the welfare system. After all, France's central economic problem is not that there are not jobs per se (although more must be created), but that those jobs are less appealing than unemployment benefits. With few entitlement obstructions and a nearly two-year grace period by which citizens can receive benefits without finding a job, many French citizens prefer to stay home and hang out with friends rather than enter the workforce. To get people into work, France needs welfare reform of the kind former President Bill Clinton and then-House Speaker Newt Gingrich agreed to in 1996. And while that reform would bring massive protests, Macron has the parliamentary power to get the reforms passed. If he did so, he would send a lightning bolt of inspiration into the business community, boosting domestic and foreign direct investment. Just as has been the case in the U.S., the French economy would soon start reflecting this confidence.
Third, Macron must continue with his methodical but crucial efforts to pare back the power of France's notorious unions. While the president has made positive steps here, more can be done to make it easier for employers to hire more people and increase their productivity. Rather than playing nice, Macron must ardently reform France's socialist economic order.
But time is of the essence. As Macron loses more support, his ability to corral his own party to push forwards his agenda will decline. If he doesn't act now, it might be too late.