Macron-omics

The French President’s Labor Reforms are Necessary, but Outpacing Employment Safeguards

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French President Emmanuel Macron has successfully reformed the country’s labor code. Now it’s time to uphold the other end of the bargain. Wikimedia Commons. 

In late March 2018, French rail workers went on a nationwide strike, causing massive delays in the country’s subway systems. Hordes of Parisian commuters could be seen exiting over-crowded cars as they returned from work hours late. And yet, this is just one of many protests in the past few months from civil servants and union members alike in France. Since passing labor reforms in August 2017, the romanticized popularity of President Emmanuel Macron has been thrown for a loop. Although he was elected by a wide margin, thousands have opposed the lack of job-for-life guarantees and meager retirement benefit plans of his more flexible labor laws. Yet this uptick in protests does not necessarily mean that reforms have been unsuccessful. On the contrary, his efforts to overhaul the indecipherably complex French labor code are overdue, and already improving growth. Employee and benefit cuts are expected to immediately accompany these newest reforms and improve national productivity, profit, and innovation. However, the National Assembly must also improve unemployment programs to ensure fair firing practices and improve long-term economic stability.

A notoriously thick red book symbolic of France’s historical socialist republic, the Code du Travail is lauded by unions but loathed by employers. France’s largest unions see the 3,324 page code as key to protecting employees from exploitation since 1910. Yet employers are often paralyzed by the Code’s dirigisme (regulatory interventionism), which demands a costly process to hire and fire employees. Modern companies see these conditions as partly responsible for the Euro’s moderate performance, France’s stagnant GDP, and its consistently high 10% unemployment rate. Youth unemployment rates are even higher, long standing near 25%. Macron took on labor reform last August as a way of revitalizing the French economy, successfully passing a bill that overhauls exceedingly rigid restrictions.   …

But while business is booming – and desperately needs to – Macron has yet to uphold the second part of the overhaul bargain.

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Economic Growth Seen as “Path to Power” in Brazil, But Will Politics Let it Happen?

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Experts discuss Brazil’s political fate on July 6. Atlantic Council. 

Amid political uncertainty and a deepening recession, economic growth is seen as the “key” to reform and prosperity in Brazil.

“If we fail economic growth, all the other scenarios would be a disaster,” said Ricardo Sennes, a nonresident senior Brazil fellow at the Atlantic Council’s Adrienne Arsht Latin America Center. “Not just disaster in the economic sense, but also political disaster with strong social disorder etc.”

Sennes spoke at an event at the Atlantic Council on June 6. He is the co-author of a new issue brief“The Path to Power in Brazil,” along with Andrea Murta, an associate director in the Council’s Latin America Center. Sennes was joined in a panel discussion by Ciro Gomes, a former Brazilian presidential candidate, and Mauricio Moura, a pollster with Ideia Inteligencia. Peter Schechter, director of the Council’s Latin America Center, moderated the discussion.

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Crisis in Brazil Seen as Foreign Trade Opportunity

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A roundtable was held in June to discuss potential benefits of the Petrobras Scandal. Atlantic Council. 

Brazil’s recent political and economic instability, while bringing uncertainty to the region, is also seen as creating an opportunity for the country to refocus its development efforts internationally.

“Times of crisis are times of opportunities,” Daniel Godinho, Brazil’s secretary for trade, said at the Atlantic Council in Washington on June 28.

“There’s a growing consensus in Brazil that in order to guarantee the future, we have to add foreign trade to our strategy,” he added.

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