Yellow vests, Covid-19 thwarts social cuts plans (Part 3 of 4)

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French President Emmanuel Macron began the election campaign in March, vying for re-election on a file somewhat hampered by five years of crisis. FRANCE 24 examines Macron’s performance on social protection issues – after the spending cuts he once promised were thwarted by the yellow vest protests and the Covid-19 pandemic.

This is the third installment in FRANCE 24’s four-episode series on Emmanuel Macron’s record as French president after previous looks at foreign policy and the economy.

After being elected in May 2017, Macron moved quickly to cut France’s social spending. That summer, the newly elected centrist opted for cuts targeting low-income people: a reduction of €5 per month on personalized housing aid and a massive reduction in assisted employment contracts.

These measures were unpopular – but consistent with the logic that a new French leader would eliminate unpopular things from the start. They also match Macron’s budget ethic at the start of his five-year term. Macron, who had served as economy minister under former Socialist President Francois Hollande, felt that if he were to increase purchasing power and boost business – while respecting the European Union’s golden rule and bringing the deficit back below 3% of GDP – there was no way around drastically reducing social spending.

Those early decisions had staunch defenders within the Macron government — the proponents of fiscal discipline that the centrist president had poached from the right. Édouard Philippe, Macron’s first prime minister, Economy Minister Bruno Le Maire and Interior Minister Gérard Darmanin, who first served under Macron as budget minister, were all conservative party transplants The Republicans.

Macron’s early economic measures – ending the wealth tax, imposing a 30% ‘flat tax’ on capital gains – went further by giving the new French leader a nickname he didn’t. hasn’t shaken yet: “the president of the rich” (the president of the rich).

The moniker stuck as Macron persisted in seeking a profound overhaul of the French social model, which is either loved or despised depending on the point of view. “We’re dropping insane money on welfare and people are still poor. We don’t see the end of it. People who are born poor stay poor. People who become poor stay poor…People have to be empowered,” Macron was seen telling advisers in a June 2018 video.

Three months later, the government deployed a “poverty plan” of 8.5 billion euros over four years. The project aimed to fundamentally rethink the French aid system in the name of “eradicating extreme poverty” within a generation. It aimed to provide free breakfasts in some schools, €1 school meals in some municipalities, child care places for children from disadvantaged families and a new universal allowance intended to consolidate a number of existing social allowances. The plan’s goals were ambitious, but they gradually fell through. And yet, cutting spending in other areas remained a priority.

“There is no magic money”

Indeed, Macron’s campaign platform in 2017 called for some 25 billion euros in savings, including 15 billion euros in the health sector. But as a result, the public health budget did not meet the needs of the sector, with the workforce increasingly stretched to the breaking point. When a healthcare worker appealed to Macron for more resources in April 2018, the president replied, “There is no magic money.” The president’s absolute priority was to respect France’s budgetary commitments to Brussels. And on this point, the results were clear to all: France’s budget deficit fell from 3.4% of GDP in 2016, before Macron’s election, to 2.8% in 2017 and 2.3% in 2018.

But the increase in the carbon tax on fuel a few months later was the last straw for some in France and the result would disrupt Macron’s plans. The yellow vests protest movement began in November 2018 with a revolt by motorists against rising fuel prices (French drivers are required to keep high-visibility vests inside their vehicles as a safety measure) before escalate into a broader rebellion against the rising cost of living. and against the government. At first, French leaders downplayed the move. But within weeks, he could no longer be ignored. As fiery protests took hold on roundabouts across the country, Macron was forced to change course.

To ease tensions in early 2019, Macron launched the Great Debate, a months-long dialogue pursuit intended to register complaints from the public across the country. He also took steps to boost purchasing power, including a €5 billion income tax cut, a €100 bonus for low-income workers and an increase in minimum pension benefits. . The controversial carbon tax hike, meanwhile, was simply reversed. In total, the net result was 17 billion euros in new public spending.

flag as he marches amid tear gas on the Avenue des Champs-Elysees near the Arc de Triomphe during a national day of protest by the yellow vest movement in Paris, on December 8, 2018.” srcset=”https://s.france24.com/media/display/7b6cbc02-087e-11ea-96a5-005056bf87d6/yellow-vests-insurgency.jpg” sizes=”” loading=”lazy” class=”m-figure__img lazy”/>
A protester wearing a yellow vest holds a French flag as he marches amid tear gas on the Avenue des Champs-Elysees near the Arc de Triomphe during a national day of protest by the yellow vest movement in Paris, on December 8, 2018. © Christian Hartmann, Reuters

With the Yellow Vests crisis behind it, the government has renewed its reform efforts in a pinch, even at the risk of upsetting the country’s unions. But worsening conditions in hospitals sparked tensions with healthcare staff throughout 2019. Finally, in November of the same year, the government pledged 1.5 billion euros for the sector over three years , promised bonuses to nurses and orderlies and assumed a third of the debts. hospitals had incurred. But healthcare workers were unimpressed with the government’s emergency plan. More than 1,000 hospital doctors, including 600 department heads, resigned in protest from the administrative duties of their position in January 2020. And the worst was yet to come for French hospitals.

Meanwhile, the unemployment insurance reform promised by Macron, passed in 2019, raised the bar for receiving benefits while reducing the amounts allocated to individual jobseekers. Those who alternated between short contracts and periods of unemployment were penalized. And while Macron promised during his 2017 presidential campaign that the self-employed and employees who choose to quit their jobs would have access to jobseeker’s allowances, the conditions for receiving them were particularly onerous in practice. The government explained that opening the system to too many people would have resulted in unacceptable expense. Indeed, cutting costs had also been a Macron campaign promise; he had promised 10 billion euros in unemployment insurance savings.

Finally, at the end of 2019, the government decided to push through a pension reform that was also expected to generate savings. The overhaul was intended to introduce a new inflation-indexed universal points system and a so-called pivot age. The latter controversially sought to raise by two years the age at which French pensioners could receive a full pension, to 64, while maintaining the legal retirement age at 62. The measure was not well received. Hundreds of thousands of people took to the streets to protest for weeks in late 2019 and early 2020. It’s no small feat, the strike has become the longest in the history of SNCF and public transport of Paris (RATP). workers sought to save their coveted special pension plans. The government would eventually take the controversial decision to force the reform through parliament without a vote on February 29, 2020.

“No Matter the Price”

All of this was the prelude to a gigantic new crisis, the Covid-19 pandemic, which would once again crush Macron’s dreams of budget cuts and inflict overlapping health and economic crises over much of the rest of his term. . In March 2020, Macron suspended his pension reform and delayed the full rollout of his unemployment insurance overhaul. More importantly, Macron made a bold promise known as his pandemic ‘no matter the cost’ policy: he promised, whatever the cost, to support public hospitals, save businesses and jobs. and stimulate an economy that would eventually shrink. of 8%, a deeper recession than any France had known since the Second World War.

The “magic money” that Macron was unable to produce for health workers earlier in his term suddenly flowed freely and widely. The French healthcare budget has increased by 9.4% in 2020 and 7.4% in 2021, with healthcare workers winning 9 billion euros in salary increases in the summer of 2020. In the together, the emergency measures adopted by France in 2020 and 2021 cost 133.5 billion euros, according to the country’s Treasury. France’s budget deficit, meanwhile, reached 9.2% of GDP and public debt soared to more than 155% in 2020. power.

>> Macron unveils re-election manifesto and promises a stronger France in times of crisis

But as 2022 approached, with Macron vying for re-election, the centrist incumbent was forced to reassure the conservative part of his base. His unemployment insurance reform finally came into force in full in the fall of 2021. And the watchword has become responsibility. “We want to continue redefining our social contract, putting duties before rights, from respect for authority to the collection of social benefits,” government spokesman Gabriel Attal told the daily “Le Parisien”. in January.

Entering the electoral campaign in March, Macron made this vision a reality. He undertook last week to condition, if he is re-elected in April, social benefits on the condition that the recipients devote 15 to 20 hours per week to professional reintegration, either in vocational training or in partial employment. As for Macron’s postponed pension reform, the president ditched the complex overhaul once planned in favor of one that’s hardly less controversial: he promised to raise France’s legal retirement age by three years. , at 65, if the voters gave him a second term.

This article has been translated from the original in French.

French presidential election
French presidential election ©France 24
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