Hollande Signals Pro-Business Policy with Economy Appointment

The French president reassures business by appointing former banker Emmanuel Macron as his economy minister.

French president François Hollande delivers a speech outside the Elysée Palace in Paris, July 24
French president François Hollande delivers a speech outside the Elysée Palace in Paris, July 24 (Elysée)

French president François Hollande appointed former banker Emmanuel Macron as his economy minister on Tuesday. The move suggests the socialist leader is serious about reducing France’s high public deficit and unemployment rate, moving his party in a more centrist direction in the process.

Macron, who served as Hollande’s personal economic advisor until June, replaces the far-leftist Arnaud Montebourg who lost his job a day earlier after describing France’s efforts to rein in its deficit spending as “financial absurdity.”

Montebourg took two more cabinet ministers with him but a party revolt seems unlikely. One, former culture minister Aurelie Filippetti, told BFM-TV, “It is not our aim to provoke a government crisis. I will support the new government.”

Prime Minister Manuel Valls, speaking to France 2 television, said he would call a vote of confidence in parliament within the next two months. Given that such a vote is not mandatory, it suggests Valls believes he can win a majority in favor of his new cabinet.

Far leftists who are discontent with Valls’ efforts to trim spending and reduce taxes for employers could imperil their own jobs if they voted against the government. Hollande’s personal approving rating hit a 17 percent low last week in an Ipsos poll. If elections were called, the Socialists would probably lose their majority.

Town between a reformist wing led by Valls and far leftists like Montebourg, Hollande, who won the 2012 presidential election against the conservative Nicholas Sarkozy with 51.6 percent support, has struggled to unite his party behind a convincing economic and fiscal program. The removal of Montebourg and his allies could give him and Valls the opportunity to push through deeper spending cuts and enact market reforms.

The Economist, which has otherwise been highly critical of France’s lackluster economic performance, hopes so. “If Mr Valls wanted to send a message with his new government, Mr Macron is it,” the British newspaper writes.

Macron’s appointment in itself will not make it much easier for Valls to enact reforms, such as liberalizing France’s labor market and cutting spending in order to finance a €30 to €40 billion payroll tax cut. Nor will it shut up anti-austerity advocates like Montebourg. “But it does at least suggest that the Valls government is serious about pursuing a more business-friendly approach,” according to The Economist, “and about starting to bring the largely unreconstructed left into line with the rest of Europe’s social democrats.”

Le Monde, France’s most respected leftist newspaper, is not so sure. In an editorial, it laments that the Socialist Party has still not settled a fundamental question: “how to be a party of government, directing one of the major economies in the world, while continuing to remain a vehicle for an illiberal and anti-globalist ideology?” An ideology, it adds, “that sees business leaders as adversaries rather than partners.”

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