France's Socialist rebellion puts focus on economic reform

Staff Writer
Columbus CEO

PARIS (AP) — Faced with yet another revolt from a group of Socialists over how to fix France's ailing economy, the French prime minister is being forced to defend his pro-business policies to lawmakers from his own party.

Though Manuel Valls will probably win Thursday's showdown vote on a censure motion, at stake is the question of whether Socialism — and France — should evolve to meet Europe's economic expectations.

The plan to free up labor rules and regulations, authored by Economy Minister Emmanuel Macron, has improbably put some Socialist lawmakers in the same camp as their most conservative counterparts.

The bill includes a patchwork of measures from allowing more stores to open on Sundays and evenings, making it easier for employers to lay off workers, and fostering greater competition in regulated professions such as auctioneers and notaries.

Valls, who will speak to Parliament later Thursday, this week rammed the bill through without a vote by invoking rarely used special powers. That drew a censure motion by the conservative opposition, and suddenly an obscure article in the French constitution became a cause celebre for a group of Socialist mavericks who contested Macron's bill.

But the rebellion only goes so far. Even Socialists who hate the measure do not want to risk their majority. If Valls loses the vote Thursday, the government falls.

France's Socialist party is fractured between a pro-business faction —including Valls and Macron — and others who want to protect French industry and the country's considerable social and health benefits.

"The left which does nothing, achieves nothing," Macron said Wednesday on French television BFM TV. "The right, which did nothing and doesn't propose anything, achieves nothing. So we are moving forward".

"We have no time to lose," French President Francois Hollande said during the Cabinet meeting Wednesday, in comments reported by government spokesman Stephane Le Foll. Hollande added he was convident that the government would win the vote.

Hollande has pointed to the measure as an important demonstration of goodwill toward EU authorities, who allowed France yet again to put off reducing its deficit.

Facing a lagging economy and an unemployment rate above 10 percent, Hollande changed tactics in January 2014 when he announced a plan to lower taxes and spur employment. He promised to ease payroll taxes by up to 40 billion euros ($50 billion) by 2017 if businesses would hire, although the jobless rate has hardly budged. At the same time, France abandoned its pledge to bring its deficit below 3 percent in 2015, as requested by EU rules.

Macron, a former investment banker, became economy minister in August. In an interview with The Associated Press last month said he wanted to make France "a haven for entrepreneurs."

A group of Socialists revolted against that aspiration, regularly abstaining when economic measures came up for a vote. This week, about two dozen of them were ready to vote against Macron's bill, infuriated especially by the plan to make it easier for shops to open on Sundays.

Christian Paul, a leader of the Socialist mavericks, insisted they wouldn't allow Valls' government to fall. But he strongly criticized the lack of guarantees for Sunday workers and said jobs would be destroyed in small shops unable to compete with malls and chain stores.

Marc Touati, a French economist and proponent of "shock therapy" for his country, said it was disturbing that the government could not even accomplish what he described as "a mini-reform."

"It cannot pass through the normal way, which shows that France, unfortunately, is unreformable. That is very worrying and sends a very bad signal to the world" at a time when France's growth forecast is below 1 percent for 2015.

"When you compare to the sacrifices made by the Spanish, Germans, Italians, Portuguese and Irish... I'm worried about France," he said.