October 21, 2022

France is another country. They do things differently there.

A “tale of two crises” has unfolded in the last few days on the southern and northern shores of the English Channel. Both crises flow, in part, from the high rates of inflation caused by the Ukraine war and the retreat of the Covid pandemic.

In Britain, where inflation is just over 10%, a political crisis wrapped in a financial crisis has threatened to destroy the private pensions system on which millions depend. A chancellor was ejected after a few weeks in office; another prime minister has gone. Britain, though, has so far escaped civil unrest.

On Tuesday in France, however, (with inflation running at “only” 6%) there were around 200,000 people on the streets. A strike for higher pay by oil refinery workers has made petrol and diesel scarce and have spread to the railways, the Metro, schools and other public services.

Some have suggested this could be the start of a “new May 1968” or the “Popular Front” rebellion of the Thirties which gave French workers higher wages and paid holidays. It could mark the beginning of a generalised revolt, both in streets and in parliament, which could destroy President Emmanuel Macron’s second term. His Prime Minister, Élisabeth Borne, was obliged this week to resort to emergency powers to push her government’s 2023 budget through the National Assembly. Losing his parliamentary majority in the legislative elections in June (two months after winning presidential re-election) is coming back to haunt him.

But there’s a fundamental difference between the crises afflicting France and Britain. What has happened in the UK in the last few days is bizarre and unprecedented. What is happening in France is more or less normal — for France — after three years in which social unrest has been largely paused. Macron’s first term was littered with such protests, first by the Gilets Jaunes and then by union marches and strikes against pension reform.

The Gilets Jaunes rebellion of 2018-9 was very unusual — at first. It started in the apolitical, lower-middle and working classes of the countryside and outer suburbs. It was eventually hijacked by the metropolitan anti-state and anti-everything far-Left. “Fake” Gilets Jaunes and their anarchist allies dressed in black were active once again on the margins of the Paris marches this week, vandalising “capitalist” banks and burning “capitalist” litter bins.

The bulk of this week’s protests came from equally predicable sources: the militant trades union federation, the CGT (Confédération Générale du Travail ) and, before that, in a Paris march on Sunday, the hard-Left party, La France Insoumise (LFI). The CGT leader Philippe Martinez spoke of creating that perpetual fantasy of the French Left: une convergence des luttes — a merging of disparate protests and social conflicts into a single anti-government and anti-boss rebellion. He hoped that a decision by the Macron-Borne government to break, or bend, the oil strike by requisitioning key workers would produce a powerful reaction in defence of the right to strike.

The leader of the LFI and Macron’s one-time presidential rival, Jean-Luc Mélenchon, even predicted the beginning of a new “Popular Front” — a “conjunction” of Left-wing and environmental causes to create a “cycle” of revolt “never seen before in our country”. Both predictions fell flat on their faces. Mélenchon forecast 300,000 marchers on Sunday and claimed 140,000. An independent survey for the main French media organisations counted 29,500.

The day of strikes on Tuesday was somewhat more effective but not much. Only one in four rail workers stopped work. The great “convergence des luttes” was supported by 6% of teachers and 4% of public employees. The biggest French trades union federation (there are at least eight of them), the CFDT (Confédération Française Démocratique du Travail), refused to join in. The CGT oil strike, already fading, has since fallen apart. Only two out of seven refineries are still blocked and filling stations are slowly returning to normal, and the CFDT and other moderates had already signed pay deals with Total and Esso.

It’s not all over yet. There is a dangerous challenge to Macron from CGT-affiliated workers in the nuclear industry. Just under half of France’s 56 nuclear reactors are already closed for emergency repairs and routine maintenance and the strike is delaying their re-opening. If it persists, there could be widespread black-outs this winter. In sum, the hard Left overplayed its hand this week but they will threaten Macron again later in the year.

Macron and his government acted earlier than any other country in the European Union to soften the impact of inflation. They spent €100 billion this year and plan to spend another €45 billion in 2023 to keep down the price of petrol, diesel, domestic gas and electricity. France has the lowest inflation rate in the EU — an annual rate of 5.6% in September, compared to 9.9% in the Eurozone as a whole. Unfortunately for Macron, the French do not shop or fill their petrol tanks “elsewhere”. They shop in France. Even a softened inflation rate has left many people on low to medium salaries struggling to get by.

Because of arcane government rules, those on the statutory minimum wage — Le Smic — have enjoyed a cumulative rise of 8% this year. This has squeezed margins with workers on slightly higher, but still low-to-medium wage levels, leaving them feeling devalued, financially and socially. Both Macron and Élisabeth Borne have been slow to grasp this problem. They were also slow to realise that the vast windfall profits of the oil industry would permit the well-paid refinery workers to become an unlikely symbol of social injustice (to some).

Macron had wanted to keep down wages to prevent an inflationary spiral which would damage France’s competitiveness. Instead, he subsidised energy prices and offered tax breaks for one-off bonuses, hoping that would blunt the demands for higher pay. In recent days, his Prime Minister and other ministers have been belatedly urging all employers to consider wage rises — on top of the bonuses and the splurge of state-spending to dampen inflation. In other words, long-term, economic policy has been jettisoned in an attempt to calm the social unrest.

By a quirk of the political calendar, Macron and Borne also collided head-on this week with the scattered, but numerically greater, opposition in the National Assembly. Opponents of the Left, Right and far-Right had been picking apart the 2023 draft budget, trying to add billions in pet spending plans. Events in Britain might have warned them of the market dangers of messing with debt and deficits, and France’s overall national debt is much higher than Britain’s — 114.6% of GDP, compared to just under 100%.

The opposition was only playing games. They knew that the government would eventually blow its playground whistle and use its emergency constitutional power to impose something close to the original budget. Borne did so on Wednesday night, using a clause of the constitution inserted by Charles de Gaulle for exactly this purpose. Every previous president of the Fifth Republic has used 49.3 at some time — even those with friendly majorities in the Assembly.

Cue, nonetheless, fake indignation on the part of Left, Right and Centre-Right, accusing Macron of “riding roughshod over democracy”. In fact, the opposition, if it cared to work together, could overturn Article 49.3, the budget and the Borne government by passing a censure motion. An absolute majority of the 577 deputies is needed or 289 actual votes in favour. Macron and Borne have 250 centrists; “the rest” have 327.

Two censure motions have been tabled. The Left refuses to vote for the far-Right motion and the far-Right refuses to vote for the Left motion. The centre-Right will not vote for either, fearing wipe-out in an early election. In other words, the government has called the opposition’s bluff, as everyone knew they would. Just like the day of inaction on Tuesday, Borne’s use of 49.3 is a faux crisis. Like the day of inaction, however, it presages a proper crisis later this winter or early in the New Year.

Emmanuel Macron insists that he will push ahead by March with his plans to increase France’s minimum retirement age from 62 to 64 by 2027. He warns that he will use 49.3 again, if necessary. He will call new elections, if he loses a vote of confidence (as, on this issue, he might). There are good arguments why France should work longer. Its minimum retirement age is the lowest in the EU. Politically, it is hazardous and even foolhardy to insist on it now. The government has no majority. The national mood, always fractious, has been darkened by two years of pandemic and the resurgence of inflation after years of low or no wage rises.

Macron has bound himself to the pensions mast. The deficit of 5% of GDP promised to Brussels and the markets next year depends on the enactment of pension reform by July. As Liz Truss and Kwasi Kwarteng found out, it’s not a good idea to disappoint (or excite) the markets when you are already hugely indebted to them. On pensions, most French people, including the moderate unions, are united in fierce opposition to Macron. For now, the President remains determined to go ahead. The true “crisis”, both on the street and in parliament, did not happen this week. It is on its way.