Macron is in a tough spot, but his pension reforms are necessary

Piles of rubbish on street corners and burning bins casting a smoky pall over city vistas have become the visual symbols of resistance to French President Emmanuel Macron’s pension reforms. Mr Macron is said by aides to be braced for the turbulence that is buffeting his presidency to continue and intensify. Already he has been denied the pomp and splendour surrounding King Charles III on a first foreign visit at Versailles. This is a crisis that Mr Macron entered with his eyes open for the trouble it would cause his government and, perhaps, to his efforts to create a legacy. There were already painful protests against the measure , which raises by two years to 64 the retirement age for the French. While the bump up in the qualifying age is modest, Mr Macron has cast this change as an important structural reform for the French economy. Without taking this step, the cost to the public of paying out pensions is set to top 15 per cent of GDP. The pinch point has already come, as there are now 17 million French pensioners – up by 4 million on the figure in 2004. Events over the weekend put France on a knife-edge. There are often politically damaging demonstrations against new policies in the country. Any presidency faces the risk of permanent damage if it gives into the calls for abandonment or if does not. There are good reasons why the French system places a particular burden on the government finances. Unlike other comparable countries, Paris has not pursued automatic private enrolment for employees to provide for their own pensions. Even corporate schemes are tied to the state system in a way that would be unimaginable for most countries. So a shake-up is essential. A note by Allianz Research at the start of the year said Mr Macron’s reforms would not go far enough. Pointing to demographic trends, it said there would be 60 people aged over 64 for every 100 people who were of working age (between 23 and 63) by 2050. To stand still, the French would have to raise the retirement age to 67 by 2050. What’s on the table would add 1.6 million people into the workforce. This development could overcome the problems with ageism currently seen in France. There is 6 per cent unemployment in the 55-64 age bracket among French workers, but the rate is only 3 per cent in Germany. Defending the reform is a red line for the president, who has also offered talks with the unions and demonstrators on workplace issues. More than 1 million on the streets of 20 cities is hard to write off as a spasm. The likelihood is that it will be the last big domestic overhaul of a presidency that still has four years left to run. Circumstances have changed since Mr Macron won re-election last year. The loss of the governing party’s majority in the National Assembly robs him of a platform to promote his agenda. The president was forced to use Article 49, paragraph 3 of the constitution to ram his pension proposal through last week. It is a democratic instrument that provides for a vote of no confidence in the government as a proxy for ratification. The 49.3 article has been used a hundred times since it came into being in the 1950s. Charles de Gaulle used it to press ahead with developing the nuclear deterrent. Mr Macron won the no-confidence vote , but the manner in which the provision was used has escalated the clash with the streets. This has made him vulnerable as his poll ratings have slipped below 30 per cent. Aides are worried about the unforeseeable twists when pressure builds on an administration. Ten years ago, a “Leonarda” moment defined the presidency of Francois Hollande, when his government was keen to show toughness against migrants and people without papers. Officials tracked down a young Roma girl called Leonarda Dibrani, then 15, on school trip, snatched her and deported the pupil with the rest of her family to Kosovo. The anti-Roma campaign had gone too far for public opinion, and Mr Hollande’s government crumbled in the backlash. His decision to allow Leonarda to return to the French school to complete her education, but not with her family, satisfied nobody. A weak presidency faced a baked-in loss of power after one term. As a result of its revolutionary history, there is an idea in France that demonstrations can be a means of changing the direction of the government. When public opinion backs protests, it can become accepted that 49.3 was invoked to a decision against the will of the people. This is the danger Mr Macron must somehow avert in the days ahead. When he first came to power, Mr Macron observed that he would like to be a “Jupiterian” president. Like the Roman god, he would display his will by throwing down thunderbolts that would cajole the system. During the pensions debate, opposition legislators twisted that Roman reference to hold up posters of the corrupt and wasteful emperor Caligula. The French newspaper Le Monde , with a hint of despair, said the deeper lesson of the crisis was an absence of leadership to look up to across the country. “An isolated president, a weakened prime minister, an overheated National Assembly, streets in turmoil,” an editorial listing its woes said. Roiling or escalating violence will surely drain support for the protests, however, and Mr Macron must ensure the state maintains its authority. By doing so steadily and with an open hand to his opponents, the French leader can still defend his very necessary reforms.