Emmanuel Macron’s five-year term, economic policy hit by an unprecedented crisis

The Edouard Philip administration’s first move from the right is heading in the direction of a supply shock in favor of the enterprise: capital tax cuts and establishment by converting the ISF to a real estate wealth tax (IFI). Single tax rate on capital income (“flat tax”), labor market reform, CICE changed to reduced contributions.

This strategy is based on three axes aimed at “showing signs of attraction, better paid work, and long-term measures such as key investment plans and professional training,” the Rexecode Institute said. Economist Emmanuel Jessua summarizes.

Damaged social aspects

Very quickly, this momentum collapsed and measures were taken to point to some of the population, such as a € 5 reduction in APL. This was what the President of the Republic dragged like a ball and chain throughout his mission. Three economists, Jumpisani Ferry, Philip Martin and Philip Agion, who influenced Emmanuel Macron’s program, Elysee in mid-2018 to warn that the social aspects of the original promise were forgotten. I sent a note to. “The liberating and social aspects that existed in the 2017 program are also the decisions made. […] “In a speech held,” recalls Philip Martin, who says, “In the image of the economy, there is a real burst in five years, for example, as shown in its increased appeal.” Is emphasized.

On the majority side, some are frustrated by the importance taken by ministers from the right, such as Minister of Economy Bruno Le Mer and Gerald Darmanin of the budget.

A more social “turning point”

Second, one of the compasses is to reduce the public deficit to 3% of GDP in order to get France out of Europe’s excessive deficit process. It will be held in 2017.

However, the “yellow vest” social movement triggered by the announced carbon tax hike on fuel is off track. To quell the rebellion, executives are taking key steps in favor of the middle class, such as purchasing power, especially a € 5 billion reduction in income tax, an increase in activity bonuses, or a revaluation of the youngest. Year.

This represents a “social turning point” for Philip Martin. Despite the drop in unemployment to 7.4% at the end of 2021, socialist vice president Valerie Lavo estimates that it is a turning point where the idea of ​​”increasing inequality” cannot be erased. Is a group in the assembly.

“The Yellow Vest ran into its original ambitions in terms of finances and a balanced budget,” Emmanuel Jessua points out.

“Take your life”

During this time, executives sought to successfully end negotiations on pension and unemployment insurance reform, which further pointed out the union.

The Covid-19 pandemic, which will affect France in the spring of 2020, will improve pension reform. The health and economic crisis it causes disrupts plans for the end of a five-year term. Going forward, the country is spending “whatever the cost” to save jobs and revive economic activity for companies suffering from an unprecedented 8% recession since World War II.

Result: A deficit that grows to 9.2% of GDP and public debt that will explode to over 115% in 2020. The crisis revealed weaknesses in the French economy, especially its dependence on industry, and prompted the country to reinvest in its strategy sector by the Recovery Plan and the France 2030 Investment Plan.

Thus, despite the trade deficit reaching record levels in 2020 and the destruction of industrial employment ceasing, “the five-year term has not corrected the situation regarding the loss of economic sovereignty.” Judge Valerie Labeau said.