A Dose of Neoliberalism
Whilst many of his social positions - such as his hostility to the LGBT community and frankly harsh views on refugees fleeing war-torn regions like Syria - are beyond disagreeable, Fillon’s Thatcher-inspired economic policies are a bittersweet medicine for the French economy; exactly what it needs right now.
François Fillon’s economic policies would challenge the socialist traditions and put the country on a path towards sustainable growth, much like Thatcher did for Britain. Her neoliberal economics was a shock to the system that Britain, burdened by unions and overly-bureaucratic labour laws, desperately needed. The British economy’s rightward lurch meant that in the long-run it now has a sensible compromise between sluggish socialist economics and raw neoliberal economics.
According to the OECD, France’s lack of growth is its “fundamental economic problem”. Certainly, it exceeded expectations with 0.5% growth in the first quarter of 2016, but such a figure is by no means a strong one. This poor upward trajectory is down to several fundamental factors. 10.2% of the workforce, which amounts to around 3 million people, are unemployed. This pales in comparison to its Germanic neighbour which has only 4.2% of its workforce without a job. Indeed, France’s figure is about average when stacked up to the rest of the Eurozone, but that’s hardly an achievement considering the likes of Greece and Spain are also included in the maths there.
The fundamental problem is growth and lack thereof. It’s what causes stagnating aggregate supply and demand and also takes a swipe at consumer and investor confidence. Many economists believe this lacklustre growth is down to a burdensome labour market. A common complaint by French business is that it’s too costly to hire workers and difficult to lay them off when they need to. This means the labour market is slow to adapt to fluctuating economic situations and businesses are reluctant to hire workers in the first place for fear of difficulty later on. As a result, the French economy is unable to ride any “growth-waves” that come their way.
You know it’s bad when even the socialist government feels it’s best to loosen labour laws slightly. The OECD has ranked France among the strictest in the world when it comes to labour legislation and this, combined with other factors such as mismatched skills, makes the French economy prone to high unemployment and low growth rates. Fillon’s economic policies seek to counteract these problems. For instance, he seeks to extend the 35-hour workweek to boost output, slash half a million public sector jobs to reduce the role of the state, and move the burden of tax away from businesses, all whilst remaining in the EU.
The concern however, is that his policies prove too radical for those worst affected by the poor state of the French economy; the wave of populism that has made its way into the cracks of European politics means that far-right candidate Marine Le Pen has a realistic shot at becoming France’s next leader. Whilst she offers comfort to those affected by poor growth with a promise of keeping welfare and leaving the EU, this would be a disaster for France’s trading potential.
Nonetheless, to fix the French economy, half measures just won’t cut it. With the sensible economic consensus that has followed the harsh shift of the Thatcher-era in mind, Fillon is the best candidate to fix the French economy of today and secure its future.