Macron is doing for France what Thatcher did for UK At first blush, they have little in common. Emmanuel Macron is the precocious, energetic, liberal, newly elected French President. Margaret […]

At first blush, they have little in common. Emmanuel Macron is the precocious, energetic, liberal, newly elected French President. Margaret Thatcher was Britain’s daunting, uncompromising Conservative prime minister during the 1980s.

But while their style and their politics may be poles apart, they both share a zeal for radical economic reform. And with Mr Macron poised to push through a host of domestic reforms, there is much to compare with the overhaul Mrs Thatcher wrought on Britain’s unions and industry.

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Mr Macron launched the second round of his ambitious reforms to France’s labour market this week, by gathering business leaders and trade unionists for talks about overhauling unemployment benefits.

It follows his summer changes to French labour law, and marks the next stage of what he calls the “transformation” of the French social model. Among the measures proposed are a paring down of France’s generous unemployment benefits, while boosting state-funded training to help pull the jobless back into the workplace. The reforms will make hiring and firing easier.

Most far reaching: some workplace issues will be negotiated at company level, bypassing the national union branch.

Opposition to reforms

The reforms have already generated opposition from the usual suspects.

“It was polite but firm,” the head of the Communist-backed CGT trade union, Philippe Martinez, said after meeting Mr Macron at the Élysée Palace in Paris on Thursday. But he has prepared the ground methodically by repeatedly meeting the unions so they feel included.

He hived off the most moderate and largest union, the CFDT, which is now involved in drafting the proposals. There are sweeteners, too: an extra €15bn (£13.4bn) set aside over the next five years for training, adding to an existing fund of €30bn.

In decades past, even the sniff of change to France’s generous welfare system would send unions into a tizzy: they would instruct workers take to the streets for mass protests. Ministers would inevitably back down.

But France appears to have reached a tipping point. It has become increasingly apparent across the country that many of the most pressing problems facing the economy require structural change in the over-protective welfare system.

France’s 3,334-page labour code

Once seen as a social safety net, the Byzantine labour code has grown to paralyse France’s job market. First written in 1906, after a factory fire killed dozens of people, it now weighs in at 3,334-pages.

At 9.6 per cent, French joblessness is still nearly twice the level in Germany and Britain. Looking across Europe, France compares poorly when it comes to job creation, especially among small businesses. There is no shortage of brilliant businessmen but there are too many obstacles to setting up in the country. Many leave, trying their luck elsewhere.

Other factors play a role. Mr Macron needs German support for his radical eurozone reform plans. However, he can only win Berlin’s trust if he can prove his mettle by reforming France first.

Crucially, French unions are no longer what they were. Only 26,000 attended one Paris rally on Tuesday to protest against the reforms, a fraction of the hundreds of thousands who went on strike in the heyday of strikes, which would bring the country to a standstill.

Only around 10 per cent of French workers are unionised, according to labour ministry data, with the average member more likely to be older and without a permanent job. A law in 2007 banned wildcat walkouts and forced public transport unions to guarantee a minimum service during strikes. In 2015, companies in France lost 69 days to strikes per 1,000 workers – a fraction of the 1,000 days lost to strikes per 1,000 workers in the 1980s.

This brings back the comparison with Mrs Thatcher. Surveying the British economy, she saw it in the grip of unions, and needing deregulation. Her reforms were a painful wrench, and critics say she was needlessly harsh with unions. But most recognise that they unleashed a wave of liberation that lifted the economy.

Macron’s late entry into politics

Mr Macron comes from a very different place. While Mrs Thatcher was an ideologue and a staunch Conservative Party member, Mr Macron has stayed away from party politics. Before his election as president in May, his only political experience was as an affiliated economics minister in President François Hollande’s Socialist government between 2014-16.

He set up his République en Marche! (Republic on the Move!) political movement from scratch, as a centrist party attracting defectors from the left and right. Although the 39-year-old is a former investment banker, his time in Mr Hollande’s government, and his defeat of Marine Le Pen in May’s election have granted him vital political capital with left-of-centre French voters.

Philippe Crevel, head of the economic think-tank Cercle de l’Epargne, says Mr Macron shrewdly dodged a major backlash by steering clear of the most controversial topics. “Macron is stopping short of reducing employers’ charges, of cutting down the amount of leave French employees have and of getting rid of the 35-hour week,” he said.

But that sets the tone for next year’s reforms of pensions and labour charges: Mr Macron wants to slash social charges that currently make French labour costs among the highest in Europe. So far, Mr Macron has been winning his campaign to reform France. But it is far from over.