Economy. Employment – Pensions – Taxation. Economist Philippe Villemus believes that Emmanuel Macron has managed the health crisis with a little luck and big decisions. And benefits from a sharp drop in unemployment.
It is difficult to draw an economic and social balance sheet when two crises, one of which is completely unprecedented, disturb the operation of the machine: Philippe Villemus, our expert, succeeds in doing so and draws attention to an indicator that could be important: the sharp drop unemployment.
Economy, social, employment, retirement, taxation
Maintain the retirement age.
Replace wealth tax (ISF) with real estate wealth tax (IFI).
Lower corporation tax from 33.3% to 25%.
Link the RSI to the general social security scheme.
Extend unemployment benefits and condition them.
Increase net wages by eliminating employee contributions.
Help companies to welcome more young people on work-study programs and bring together the different contracts.
Enabling all workers to qualify for unemployment insurance.
Increase the activity bonus by 50%.
Partially kept promises
Lower unemployment to 7%.
Open unemployment insurance to employees who resign.
Increase the CSG by 1.7 points without affecting modest retirees.
Increase the minimum old age and reduce old-age poverty.
Provide the self-employed with the same rights as the general scheme.
-0.5% of structural deficit GDP in 2022.
Reduce the share of public expenditure to 52% of GDP in 2022.
Save 60 billion over the five-year term.
Eliminate 120,000 civil servant positions.
Convergence of pension schemes.
Fight more against social fraud.
Reserve European public contracts for companies operating in Europe.
1. An impossible assessment
Emmanuel Macron, man of the “start-up nation” had bet a lot on his economic program. Five years later, however, Philippe Villemus says it bluntly: “We cannot draw an economic balance sheet. Neither for good nor for bad.” The cause “to two hazards, one of which is totally unprecedented in the history of France: the pandemic”.
In 2020, France will experience its worst recession since 1945 with -8% “followed by a year at +5%. That means absolutely nothing. The pandemic has confined people but also the economy. And it has confined reforms”. In 2022, an initial assessment could have been made with a fairly strong recovery, but falls “a second hazard with the war in Ukraine which will generate global uncertainty. Confidence is the first pillar of economic growth. And with these two hazards we see a surge in inflation”.
2. Emmanuel Macron, the baraka?
Although two major crises have hit the President’s five-year term, Philippe Villemus believes that Emmanuel Macron “got the baraka. Because when he came to power, he benefited from a situation that was improving on the global level. When he was elected, France was doing better. Unemployment began to fall and growth resumed “.
The economist de facto believes that Emmanuel Macron’s balance sheet can only relate to “the management of the pandemic. And objectively, we can only note that in broad outline, it was well carried out with partial unemployment and the numerous aids which avoided a major crisis”.
3. The great measure of “whatever it takes”
According to Philippe Villemus, the flagship measure is “whatever the cost”. This criticized decision was a great decision, perhaps among the greatest of the last 20 years at the level of a government”notes the economist.
In the same way as the major markers such as the suppression of the ISF or the 35 hours. Aid for the self-employed and especially partial unemployment “which made it possible not to fall into poverty or unemployment. The bet paid off. There is even talk of a shortage of employees in many sectors of activity. And there have been very few bankruptcies of self-employed people”.
For the economist, we fell lower in 2020 than the Germans, but the rebound in 2021 was stronger than across the Rhine: “I would have been told in March 2020 at the time of the first confinement, that today unemployment would be at this level, that we would have such strong growth and the level of activity of 2019, I will not have it. believed like most economists and observers”summarizes the specialist.
4. Inflation to reduce deficits?
Admittedly, the President has not managed to lower the deficit and even less to save 60 billion euros over the five-year term, as he promised in 2017. “It was not possible to reduce spending during the crisis, but there is another lever: inflation”points out Philippe Villemus.
Which he considers to be a paradox: “At the same time, it affects the purchasing power of households but it is favorable to the absorption of the debt. This is true for a household which has borrowed at very low rates, as from a State which has sometimes borrowed at negative rates”.
Anyway, the next host of the Élysée “will not be able to let inflation slip away because if wages do not increase the equation will not be tenable. It will be difficult to live with anyway, especially if the war in Ukraine is to last more than a year”.
5. The importance of the level of unemployment
For Philippe Villemus, in the hierarchy of themes that lead to re-elections: “Unemployment comes first. Security, immigration, health… it is important, but there is a direct correlation with unemployment”insists the economist.
To sum up: when unemployment is high, governments jump. When unemployment drops, governments are reappointed. A constant in the Fifth Republic in particular for Sarkozy and Holland.
“Emmanuel Macron will be one of the only ones to see unemployment fall during his five-year term. This produces a virtuous dynamic: more consumption, funded pensions… But we will have to watch inflation because this may promise a social crisis at least as lasts than that of the “yellow vests”.
Audrey Mula, Real Estate Evidence Manager: “There have been neither great benefits nor disasters”
Audrey Mula, director and founder of the Evidence Immobilier group, reveals a mixed picture regarding the business economy.
During his campaign, Emmanuel Macron was “very convincing”, she says. For Audrey Mula, the head of state has kept his promises of reform, but the results are mixed: “There have been no great benefits or great disasters. […] He didn’t do anything fundamental contrary to the announced ambitions, it’s a disappointment.”
Audrey Mula believes that the head of state had started well before the crises of “yellow vests”, pension reform and Covid-19 arose. The entrepreneur also denounces a real problem at the level of youth in the world of entrepreneurship, although “the apprenticeship reform has allowed us to hire young people, but it has not been revolutionary” .
On the positive side, “the 8% less on profits” is, according to her, the main point. She continues: “We cannot say that we are not happy with this gesture, it is undeniable.”