French President Emmanuel Macron was elected with a clear mandate to reform the French economy, and he has not hesitated to target politically sensitive institutions such as the national railway. But if Macron acquiesces to ongoing protests by France's unions, the rest of his reform agenda will become vulnerable.
French President Emmanuel Macron received plenty of praise in the international media for his recent speeches in Washington, DC, and Brussels. But for the French, what really matters is Macron’s management of domestic problems, of which there are many, not least rolling strikes by railway workers across the country.
Until the end of June, employees of the French state-owned railway company SNCF plan to strike for two out of every five days to oppose the Macron government’s planned reforms to the company. But the reforms are sorely needed. The SNCF’s operating costs are 30% higher than those of comparable railway systems in neighboring countries, and its performance is poorer.
The SNCF’s higher operating costs stem partly from flawed, politically motivated investment decisions made in the past. For example, there has been undue emphasis on expanding high-speed-rail networks at the expense of maintaining existing tracks that are still widely used.
But the company also suffers from obsolete and costly labor arrangements, which allow train drivers to retire at the age of 52, even though they are no longer subjected to the life-shortening rigors of operating coal-fired steam engines. As it happens, the life expectancy among SNCF drivers has increased substantially since these pension regulations were put in place in 1920.
Moreover, SNCF employees and their family members have access to free travel on SNCF trains. This is one reason why the French railway system brings in just €10 billion ($12 billion) per year, even though it costs €24 billion annually to operate. The difference is essentially financed by the federal government and the regions, at a cost of some €3 billion in additional public debt each year.
Given its drain on public budgets and its deteriorating performance and reliability, the SNCF is an obvious target for reform. And to that end, Macron has proposed a strategy to shore up the French railway system for the long term. Notably, one thing he has not proposed is any change to current SNCF workers’ employment status or benefits.
Instead, Macron’s government has introduced changes that will affect only those employed by the SNCF after January 1, 2020. For them, his program does imply an end to lifelong job security, and a shift to a more modern, flexible employment arrangement. There will also have to be a re-evaluation of the specific constraints on SNCF workers and supervisors, many of which have not been updated since 1920. And newer employees will need to be incorporated into the French general health-insurance and pension systems.
Beyond that, Macron wants to open up the railway system to allow new operators to compete against the SNCF. Similar reforms have reduced operating costs and increased the overall supply of trains by 32% in Germany, 30% in the United Kingdom, and 53% in Sweden. In Italy and Sweden, more railway competition has reduced ticket prices by 15%.And, in Germany, competition lowered the government’s expenses by 20%. Each kilometer of regional traffic now costs the state-owned railway operator, Deutsche Bahn, €15, compared to €23 for the SNCF.
At the same time, liberalization of the railway sector promises to improve the quality of service, both in terms of travel time and punctuality. As matters stand, traveling from Marseille to Nice takes 25 minutes longer than it did 40 years ago; and, on average, 22% of French inter-city trains, along with 18-25% of high-speed trains, suffer delays, compared to just 10% of Deutsche Bahn trains.
Given this dismal state of affairs, it is worth asking why French railway unions are staging such a large-scale protest against reforms that would only affect new recruits in the future. In fact, what looks like a unified strike movement actually comprises two major unions with different demands and motivations. On one hand, there is the French Democratic Confederation of Labor (CFDT), which is open to dialogue with the government, but wants more employment and social-security guarantees for SNCF workers who will be hired by new operators after the system is opened up.
On the other hand, there is the more radical General Confederation of Labor (CGT), which insists on maintaining the status quo. Its reasons are twofold. First, the SNCF is a CGT stronghold, and to allow different contractual arrangements for new recruits would weaken the union’s influence at the national level. Second, the CGT wants to use this strike as a starting point for derailing Macron’s entire reform agenda.
But Macron was elected with a clear mandate to overhaul the French economy. Though he has proved flexible on the timing and method of introducing competition, he will likely defend his red lines, particularly those relating to new SNCF recruits as of 2020. After all, he knows what the CGT knows: that his railway policy could make or break his credibility as a reformer.
Macron’s Internationalism and the New Politics
French President Emmanuel Macron initially described his new political movement as being “neither on the right nor on the left,” and now says that it is “on both the right and the left.” But he won't be able to fudge it indefinitely: sooner or later, he will have to pick a side with which to ally.
French President Emmanuel Macron’s state visit to the United States last month was a study in contrasts. Despite the friendly dynamic, Macron’s agenda and rhetoric were almost diametrically opposed to US President Donald Trump’s. But Macron’s leadership is subject to an even more fundamental challenge; how he manages it could point the way forward for liberal-democratic politics.
Addressing the US Congress in English, Macron articulated a staunchly internationalist worldview, calling for stronger international institutions, a recommitment to the rules-based system of international trade, and a general embrace of globalization. With regard to Iran, he reiterated the need to preserve the 2015 nuclear deal, from which Trump has just withdrawn, though he did call for complementary agreements on topics that the existing agreement does not address.
Macron has also signaled that he will pursue a pan-European campaign for the 2019 European Parliament election. As a democrat, he believes that the deepening of the European Union must go hand in hand with the development of a truly European political space.
At a time of much hand-wringing over the decline of liberalism, the future of social democracy, the rise of nationalism, and the backlash against globalization, Macron’s unapologetically internationalist stance is notable. In fact, Macron has taken a leap into the unknown of the West’s “new politics,” a terrain no longer defined entirely by competition between large center-right and center-left parties. But is politics really turning the page on the traditional right-left cleavage?
It would be wrong to describe Macron, who served as a minister in his predecessor François Hollande’s Socialist government, simply as a centrist. Although he has moved toward the center, he did not join one of the small traditional centrist parties, but instead created his own “movement.”
Early on, Macron described that movement – which he called En Marche ! – as “neither on the right nor on the left” – avoiding the term “centrist.” Now, he says it is on “both the right and the left,” signaling his desire to win over traditional center-left and center-right voters.
If the traditional left-right divide is blurring, however, the question is what will replace it. With globalization at the center of political debate in most countries, it may seem that the answer is a division between cosmopolitan and parochial forces.
According to this interpretation, Macron leads France’s pro-globalization (and pro-European) movement, and those who oppose him, on the right or the left, are linked by a shared opposition to economic openness. And, indeed, the far right and the far left are espousing similar economic messages.
Meanwhile, existing center-left and center-right political parties – in France and throughout the West – tend to comprise internationally oriented factions and those who are more suspicious of globalization. If globalization is becoming the main electoral cleavage in Western countries, these two camps, the logic goes, are likely to split and form new political families.
Yet, while I believe there will be some movement in this direction, the traditional left-right cleavage seems unlikely to disappear. Traditional parties will continue to debate issues concerning income distribution, including the progressivity of tax systems and the proper scope and aims of social policy. The globalization “platform” alone will not be robust enough to define a large political party.
This means that in the coming years, Macron will have to align himself more closely with either the center-right or the center-left. The particular circumstances that enabled his electoral victory in 2017 – a discredited center-left, and a center-right candidate disqualified by scandal – will not reproduce themselves. He will have to become an internationalist left-leaning leader or an internationalist right-leaning one.
Only one of those appears to be a tenable option. The traditional policies of the center-right would not easily be compatible with a strong internationalist bent. If globalization, in its various dimensions, is to be backed by a popular majority, it will have to be accompanied by modernized social policies that provide effective help to those who need it. At a time of continuous economic disruption, this will be all the more important.
Economic openness demands social solidarity. That does not means protecting specific jobs from trade competition or technological innovation. It means assisting people to adapt to continuous change, by providing all citizens with the necessary resources, such as education, accessible health care, and transitional support. In short, a popular pro-globalization stance must be accompanied by a new social contract – backed by public resources – that appeals to a large majority. Otherwise, the siren song of neo-nationalism will be difficult to resist.
While completing the necessary tax and labor-market reforms on which he has embarked, Macron will need to address this challenge. In the current political paradigm shift, those who favor openness will outshine nationalist unilateralism only by adopting as their primary objective a modernized approach to social solidarity.