France and Germany are falling out over labour-law reform

Julian Lagnado

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Two important events happened in France last week, and they are rocking the European Union boat at a time when it badly needs to appear to stay afloat. They could have a roll-on effect on the Brexit referendum in June, too.

First, there was the resistance to president Francois Hollande’s attempt, a la Francois Mitterand, to make a centre-right turn by reforming France’s worker-protecting labour code (Code du Travail). The code enjoys Biblical status among the French left, and is Biblical in length.

The reason for Hollande fiddling with labour law? With just one year to go before the next presidential elections, he is under pressure to keep the promise he made to lower the unemployment level, which currently stands at over 10 per cent and is still climbing. To that end, his hit team – Manuel Valls (prime minister), Emmanuel Macron (economic minister) and Myriam El Kohmri (labour minister) – has stitched together a labour-law reform bill, which would make it easier for firms to hire and fire and would herald the de facto end of the 35-hour week.

These reforms are welcomed by industrialists, entrepreneurs and artisans, but not by socialists, trade unions and students. Martine Aubry, a leading figure on the left of the Socialist Party, said, ‘Who could imagine that making redundancies easier will encourage employment?’. After all, Hollande was not voted in on such a mandate; rather, he promised a 75 per cent tax on the rich.

The French National Union of Students, L’UNEF, which helped organise a big demonstration on 9 March and will do so again on 17 March, was invited to the Matignon (the official residence of the prime minister). L’UNEF members confronted Valls, Macron and El Kohmri with their firm opposition to the precarious nature of the proposed work contracts and their concerns about the effect they will have on their retirement benefits in 40 years time.

The French government has also been under pressure for some time now from the EU to reform the economy, and that means the labour code, too. German chancellor Angela Merkel has been exigent on this point. Past efforts by Villepin and Sarkozy, which ran aground, set a precedent. It looks increasingly likely that Hollande and the team he created to ‘make things move’ will find themselves stuck in the same rut as their predecessors.

The second event will have a more direct impact on the EU. This weekend’s headline in Le Figaro was ‘Merkel can no longer rely on France in Europe’. The paper’s Brussels correspondent, Jean-Jaques Mevel, suggested that the Franco-German relationship has broken down. Hollande is being shunned.

The differences between the two countries lie squarely on the fault line of the refugee crisis. While Germany is having to deal with its one million new immigrants alone, ‘Fortress France’ is, after the Paris attacks and the threat of the National Front, preoccupied with national security. It doesn’t help Hollande that his own party is splitting over the reform bill.

The EU is going through yet another crisis, Berlin has lost confidence in Hollande and Marine Le Pen is crouching in the long grass, waiting.

Julian Lagnado is a writer living in France.

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