Key Challenges

Traditional-party collapse marks crossroads
France is at a crossroads. The collapse of the traditional party system following the 2017 presidential election and the political earthquake triggered by Macron’s election open radically new perspectives. The challenges now are not so much “what to do?” but rather “will the president and his majority be capable of fulfilling the promises they have made?”
A stronger France for
a stronger EU
Macron has insisted that the European Union should be more efficient, integrated and protective, but that France should first do its “homework.” He knows that only a strong and successful French reform agenda will give him the credibility to convince his EU partners of his vision. Macron enjoys a strong majority in the National Assembly and the institutions of the Fifth Republic offer effective instruments for achieving deep reform. The problems lie elsewhere: how to convince a reluctant and volatile public that the new government will make the right policy choices? Given the absence of a strong political opposition, social protest will be the main obstacle that the new government will likely face over the coming years.
France has to tackle four major challenges.
Party system must be reconstructed
The first one is political. The entire party system has to be reconstructed after the 2017 political earthquake. While this destructive phase has permitted Macron to sweep away the old political forces to the advantage of his new movement, it has also contributed to the weakening of the traditional mediatory institutions which will have to be rebuilt. This is also true for the president’s movement, La République en Marche, which will have to transform itself into a party capable of fulfilling a mediatory role. The time horizon is short. The renewal of political forces has to be achieved before the next presidential election in 2022.
Well-known economic
challenges remain.
Reform drive must persist into medium term
The second challenge is financial, budgetary and economic. The diagnosis is well-known: public deficits and debt must be drastically reduced, fiscal pressure lowered, and unemployment addressed with drastic policy changes. The task is daunting. However, two factors might help. The first one is linked to the overall economic improvement in the European Union and worldwide. This will help the government to respect EU rules on budget deficits, which in recent years France has repeatedly broken, and hopefully stabilize public debt. It will also absorb some of the unavoidable economic and social costs of reform. The other factor is Macron’s commitment to an ambitious reform agenda. For the time being, the government has proceeded with speed and energy, leaving little space for opposition. The key issue will be the government’s capacity to pursue its policy choices in the years to come. The disconnection between the (short-term) political agenda and the (medium- to long-term) economic agenda is a crucial component of the equation. Indeed, there are not many more savings to be expected if structural reforms are not adopted and implemented. Education, professional training and industrial reconstruction are some of the many sectors that need to be restructured in order to achieve more substantial benefits.
Public-sector reform vital, but controversial
The third challenge is related to the overall structure of the bureaucracy and public sector. Both are comparatively inflated and inefficient. The approach to tackling unemployment by increasing public sector employment (in particular at the local level) has failed, and has considerably lowered the effectiveness and efficiency of public service provision. Similarly, the introduction of a more competitive framework for some public sectors (such as transportation) has repeatedly been postponed. Trimming redundant or inefficient administrations, revising policies that benefit vested interests, and simplifying the complex multi-layered territorial system (“millefeuille”) will be necessary reforms. However, such reforms will likely produce protest and discontent in the short-term, while only proving beneficial much later.
Integration model
is broken
A fourth major challenge concerns the intertwined issues of security, immigration and integration. The traditional French model, based on an open policy toward immigrants acquiring French nationality and on the principle of equality of all citizens regardless of ethnic origins or religion, has lost its integrative power over the last 30 years. The former key instruments of the integration process (education, work, religion, political parties and trade unions) are no longer effective, while the recent terrorist attacks have further weakened integration processes. This challenge requires multifaceted policy solutions in areas including security, urban development, and education and job training, with a primary focus on employment opportunities for the most marginalized citizens. What is at stake is the country’s political and social cohesion, and common national values and rules. Unfortunately, the present situation is characterized by an identity crisis, an ethnic divide, the exclusion of migrants and political frustrations which have, in part, benefited extremist political candidates and parties.
Clear choices, honest dialogue needed
France needs courageous policies that include clear (even if unpopular) choices, frankness when explaining the challenges, more social dialog, and a more streamlined and coordinated style of governance. The good news is that the newly elected president is fully and explicitly committed to this reform agenda.
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