Will the election of Emmanuel Macron enable France to relaunch itself and revive Europe? We would like to think so but this is not guaranteed. The new president does have some good insights but the overall impression is of a programme in draft version and somewhat opportunist.

The most promising project is the modernisation and unification of our social protection. In France more than elsewhere, our social system has been constructed in stages with layers of reform stacked one on top of the other. The result is considerable complexity and illegibility. The most extreme example is the retirement pension schemes. The system is well financed but the multitude of schemes and rules means that nobody understands anything about his or her future rights. A consolidation exercise is required, in particular for the young generations whose career paths often include several jobs in the public sector, the private and as entrepreneurs which should entitle people to the same rights. There is as yet no agreement on new common rules, on how to deal with fragmented careers, or with arduous or strenuous jobs, etc. This will be quite a challenge, particularly as we are starting from practically zero (there is only one line in Macron’s programme dealing with the consolidation of the retirement schemes).

Another major project is unemployment insurance. Once again, it is important not to miss the target. The tightening of the rules imposed on the unemployed is supposed to lead to enormous (and barely credible) economies and the extension of rights for voluntary departures and the self-employed is not well thought out. Instead, the system should be extended to the public sector where ultra-precarious contracts have been allowed to develop with the utmost hypocrisy and workers being totally excluded from unemployment insurance. In the Labour Code the conditions for balanced reform are clear: clarification and possibly an easing in the conditions for terminating a permanent contract (CDI) can only be developed if recruitment on a permanent basis becomes the norm and the use of temporary contracts (CDD) is restricted. We should furthermore bear in mind that the extreme decentralisation of wage negotiations has contributed to the enormous surplus in Germany and is not the best recipe for balanced development in Europe.

The Macron programme has good ideas on education: finally giving real additional means to disadvantaged schools which to date have merely been stigmatized. However the proposed measure seems to focus on the first grades in primary schools (inequality of opportunity must be tackled at least until middle school) and it is not consistent with the cuts in spending announced, except if the numbers in classes in the other schools are considerably increased. The intended return to the 4 day week which is harmful and does not exist anywhere else is also an indication of the ambiguities of the Macron system: a pinch of reform and a large dose of conservatism.

More broadly, it is difficult to see an overall vision for a real strategy of investment in vocational training. This is however crucial. At the moment, France has the most productive labour force in the world (on a par with Germany, and with a model which is much more equalitarian than the United States), but this position is far from being guaranteed. The country is emerging from a 10 year recession (the GDP per capita in 2017 is 5% lower than it was in 2007); the catastrophic consequence is a drop in almost 10% in the investment per student in higher education. We should always remember that the French population is still increasing (contrary to the Germany population) and the student population is growing even more quickly. This is an excellent thing as long as adequate means are provided.

Macron is extremely conservative in matters of the financing of social protection and taxation. He focuses exclusively on the increase in the general social security contribution (the CSG) whereas today, what is urgent is the deduction of income tax at the source. France is preparing to implement this reform in January 2018, half a century after all the other countries, but now Macron wishes to postpone it – a rather odd decision on the part of someone who claims to be modernising the country. This reform would finally enable the convergence of income tax (IR) and the general social security contribution (the CSG) which must become progressive and not proportional for both salaried employees, retired people and other incomes. Macron obviously has a problem with the very concept of a progressive tax, since he proposes capping at 30% the taxation on the highest financial incomes (as compared with 55% for the equivalent highest labor incomes), and eliminating the wealth tax on financial portfolios (for some strange reason, Macron considers that financial investment is necessarily more productive than real estate investment).

Finally, let’s turn to the reform of Europe. The central issue is to endow the Euro zone with solid democratic institutions enabling it to deal with crises in the future. When the interest rates begin to rise again, when strong democratic legitimacy will be required to take the difficult decisions on rescheduling the debts, it is not behind the closed doors of meetings of Heads of States and Ministers of Finance that the problems will be resolved. We will need the support of broad public deliberation and the plurality of views expressed in each country and therefore the support of a Euro Zone Assembly based on members of the national and the European parliaments. The absence of strong democratic institutions is the most serious danger threatening Europe. Unfortunately, there is nothing to suggest that the French and German elections this year will enable us to overcome this.