French Government Survives Confidence Vote

The Socialists survive a confidence vote after ramming through economic reforms.

France’s Socialist Party government survived a confidence vote on Thursday called by the conservative opposition after it rammed through economic reforms without consulting parliament.

Earlier in the week, President François Hollande used emergency powers allowed under the Constitution to bypass lawmakers and enact liberal economic reforms that are meant to pull the country out of malaise and avoid a confrontation with the rest of the European Union.

Manuel Valls, Hollande’s reformist prime minister, recognized that a majority of lawmakers might have voted down the measures had they been put up to a vote. He argued that the government could not risk their rejection. “Nothing will make us move back,” he said.

Hollande and Valls gambled that rebels in their party would fall back in line to avoid bringing down the government and forcing snap elections when they are down in the polls.

With unemployment over 10 percent and the French economy projected to grow less than 1 percent this year, many economists said liberalization was long overdue.

The European Commission had also urged France for many years to relax labor laws and altogether improve the ease of doing business. France’s failure to reform could have raised pressure on the commission to fine Europe’s second largest economy for once again missing its deficit target this year.

However, leftwingers in the ruling Socialist Party were critical, seeing the reforms that were put together by Emmanuel Macron — a former banker whom they mistrust anyway — as an erosion of the French social model.

The changes allow businesses to operate on more Sundays, shorten labor arbitration procedures and open up protected professions such as pharmacists and notaries.

The measures come on top of tax cuts worth €40 billion by 2017 that should help companies reduce labor costs.

Labor costs in France, at €34 per hour, far exceed the European average of €23.

Macron rejected criticism in an interview with BFM TV on Wednesday night, saying the far left “does nothing, achieves nothing” while the right “did nothing and doesn’t propose anything.” He added, “So we are moving forward.”

Only a few conservatives broke ranks with former president and party leader Nicolas Sarkozy, who started a political comeback last year, to express support for policy changes their party has advocated since 2007.

Although polls show a majority of the French favor the reforms, Hollande’s inability to get his party to support them underlined his consistent unpopularity after even his previously record-low approval ratings had ticked up a little in the wake of last month’s Islamist terror attacks in Paris.