Emmanuel Macron’s Plan to Save France—and the Euro

Credit: fortune.com

After no little drama, the centrist, pro-European, socially liberal Emmanuel Macron has been elected President of France for the next five years. His triumph over isolationist populist Marine Le Pen promises to deliver a much-needed boost to the French economy. But the former Rothschild banker's agenda will face major hurdles, both at home and in the rest of Europe.

Macron's signature economic promise is to slash France's nonwage costs, in particular by radically slimming its state pension systems. Macron thinks that could cut 500 euros ($550) off the annual cost of employing someone. He has also vowed to give more freedom to companies negotiating wage deals with labor unions, to restore tax benefits on overtime, and to encourage social mobility by subsidizing the hiring of people from France's most deprived areas. All this is aimed at cutting the country's 10% unemployment and narrowing the deficit in a budget that hasn't been balanced in 30 years.

If Macron can do that, he may have half a chance of persuading Germany, finally, to accept the need for a common treasury and budget for the euro-zone. Analysts say this is the long-term fix that could save the single currency, but Angela Merkel and her forebears have rebuffed similar demands from Paris for decades, wary of bankrolling other countries' spending.

Before he can do anything, though, Macron must win enough support in France's June 18 legislative elections to push through reforms--which are bound to offend large parts of a sprawling public sector. If this election doesn't go as well as his last, he could become yet another ineffective French President.

A version of this article appears in the June 1, 2017 issue of Fortune with the headline “Macron Economics.”

US Weekly

Top Stories

Intel and Big Banks Put $100 Million in Finance Tech Firm R3

Investors include HSBC, Bank of America, Wells Fargo, and more.
  • 4 days ago
  • 31

Different Ways Customer Information Can Benefit Your Business

Different Ways Customer Information Can Benefit Your Business It is not a secret that today’s customers are pickier – for the lack of a better word –
  • 5 days ago
  • 16

Saxo Bank’s bespoke focus continues as Open Banking initiatives strengthened via developer portal

FinanceFeeds - Saxo Bank has long committed itself to the development of ‘open’ systems for its commercial clients, FinanceFeeds’ Andrew Saks-McLeod having... The post Saxo Bank’s bespoke focus continues as Open Banking initiatives strengthened via developer portal appeared first on FinanceFeeds.
  • 4 days ago
  • 14

Plan to sell oil reserves evidence of growing swagger of U.S. energy industry ahead of OPEC meeting

The idea is being floated just as members of the OPEC members meet in Vienna on Thursday to discuss whether they will extend a six-month contract to reduce oil supplies
  • 4 days ago
  • 13

Morneau’s growth council to focus on unlocking business spending, broadening job skills help

The council's chair said the group's next report, due this fall, will outline ways to encourage more business investment with the aim of reversing several years of decline
  • 4 days ago
  • 13

Latest in Financial

Walt Disney World’s Avatar Theme Park Showcasing Pandora Is Now Open

The theme park is based on James Cameron's smash hit.
  • 19 minutes ago

Roku’s CEO on Netflix, Amazon, Google, and the Future of TV

It's a lot more number-crunching than you'd expect.
  • 1 hour ago

Why America’s Vets Make the Best Leaders

A former Marine gives her take.
  • 1 hour ago

Apple’s iPhone Market Share Slips as It Eyes $1 Trillion Valuation

And all the other Apple news and rumors this week.
  • 2 hours ago

The Case Against Counting Calories

What if the data is wrong?
  • 4 hours ago

CEO Daily: Saturday May 27, 2017

The special Sino Saturday edition of CEO Daily.
  • 10 hours ago

China industrial companies post strong growth in first four months

CHINA'S major industrial firms posted double-digit growth in profits in the first four months of this year, the National Bureau of Statistics (NBS) said Saturday. The companies reported a 24.4-percent
  • 14 hours ago

After eight years, Nortel Canada creditors finally get something

Bondholders, suppliers and former employees will finally start receiving their share of the roughly US$4 billion raised, more than eight years after the company filed for bankruptcy
  • 16 hours ago

Copyright ruling called ‘bad news for consumers, bad news for Canada’

Internet service providers are bracing for a flood of requests to turn over the identities of subscribers that allegedly download pirated movies
  • 17 hours ago

Ontario threatens its own protectionism in fight against Texas Buy American bill

The province says it's concerned a bill to extend Buy American provisions to virtually all state agencies in Texas is going to a final review and could get approval as soon as this weekend
  • 17 hours ago

Ottawa won’t set national electric vehicle quota for manufacturers

The government has created an advisory panel aimed at bringing more zero-emission vehicles to roads across the country, a decision that advocates say is a positive step forward
  • 17 hours ago

Why beloved camp culture brand Beaver Canoe has gone to the dogs

Sorry, there are no current plans for Roots to bring back the Beaver Canoe brand as an apparel brands for kids and adults
  • 18 hours ago