The rising star aiming to transform the French economy

French prime minister Manuel Valls introduces his economy minister Emmanuel Macron as "the star of my government". Macron was appointed in an emergency cabinet reshuffle on August 26th, after his predecessor, Arnaud Montebourg, led a rebellion by left-wing ministers who rejected what they regard as President François Hollande's "austerity" policies.

Everything about Macron is atypical: his youth – he will turn 37 in December; his background – he holds a doctorate in philosophy and worked for the Rothschild investment bank for four years; even his marriage to his secondary school French teacher Brigitte Trogneux, who is 20 years his senior.

During his two-year stint as Hollande’s economic adviser and deputy secretary general of the Élysée Palace, French media called Macron “the child prodigy” and “Hollande’s right brain”.

At the Élysée, he was credited with devising the CICE (tax credit for competitiveness and employment) and “responsibility pact”, which should refund €41 billion to French businesses and are vaunted as a flagship of reform by the Hollande administration.

Macron joined the socialist party at the age of 24, and, along with Valls, embodies the centrist social democrat or social liberal wing that is in open ideological war with the left of the party, led by Montebourg and the former labour minister, Martine Aubry.

Reforms and investments

The economy minister is on the frontline of several battles. Having piloted negotiations with the EU Commission from the Élysée, he now endeavours to placate German and EU officials who are angered by France’s inability to reach the 3 per cent deficit ceiling before 2017.

France

will reform, Macron promises. But at her own pace.

If France cuts €50 billion in government spending – as Paris has promised – Germany should invest €50 billion to stimulate growth in Europe, Macron says. With his German counterpart Sigmar Gabriel, Macron has initiated a study with a deadline of December 1st on reforms and investments needed to relaunch growth in both countries.

When the German and French finance and economy ministers convened in Berlin on October 20th, Macron admitted the Franco-German relationship has suffered from “insufficient reforms on our side for the last 20 years”. Macron says he is “totally certain” the commission will not reject the 2015 budget which France submitted on October 15th.

The draft “loi Macron” on “equality of economic chances” has been used by Valls as exhibit number one in his attempts to convince German and British interlocutors that France is serious about reform.

Macron proposes allowing more Sunday trading, deregulating coach transportation, as well as protected professions including court clerks, notaries and pharmacists. He wants to transform the prud'hommes (labour courts) which make it exceedingly difficult to fire French employees.

Such measures hardly add up to a massive overhaul of the French labour market or an attack on the overwhelming weight of the state in the economy. But they are considered a step in the right direction.

“At least he is trying,” says Sophie de Menthon, head of the SDME consultancy company, president of the “Ethic” group of small and medium size enterprises, and a member of the economic council CESE.

On French radio and television, Macron is making a long-neglected pedagogic effort. “We’re making reforms for our own good,” he said on France Inter radio. “We must get out of our heads the idea that they’ve been imposed on us by Berlin or Brussels.”

Business experience

Macron received a 58 per cent approval rating in a recent opinion poll by

Le Parisien

newspaper. Sixty per cent of respondents prefer him to Montebourg, 73 per cent found him “dynamic” and 62 per cent said he was “courageous”.

Macron is especially popular with the business community. “He’s adorable,” says de Menthon. “He has charm. He knows how to listen. He tells the truth. And he likes business people.”

For de Menthon, Macron’s experience at the Banque Rothschild is fundamental. “He is the only person in this government who has business experience,” she notes.

Macron became a millionaire at Rothschild, where he engineered the €9 billion sale of the children's food sector of Pfizer to Nestle. He grossed €2 million in his last 18 months at the bank, and took a 90 per cent pay cut to become Hollande's adviser.

Last March, Valls wanted to make Macron budget minister. But Hollande pointed out that Macron had never won an election. When the government collapsed in August, urgent action was needed. Jean-Pierre Jouyet, the secretary general of the Élysée and one of Hollande’s closest friends, supported Macron for the economy portfolio.

“If you want someone who knows the economy well, supports supply-side economics, has the confidence of the business community and embodies a new generation, Macron’s the only one,” Jouyet told the president.

Opponents such as the far left politician Jean-Luc Mélenchon refer snidely to Macron as "Monsieur le banquier".

In his biggest gaffe so far, Macron said that some of the employees who lost jobs when the Gad meat processing plant closed in Brittany would be difficult to employ because they are illiterate.

The former president Nicolas Sarkozy criticised Hollande “for appointing as finance (sic) minister a banker from Rothschild who calls employees illiterate”. Sarkozy had hired Rothschild banker François Pérol as a presidential adviser.

Angry response

Macron had opposed Hollande’s idea of 75 per cent income tax on French people earning more than €1 million annually. “Money must not be part of one’s identity,” he told

Nouvel Observateur

magazine in 2012. “It’s an instrument of freedom; nothing more.”

When a listener called France Inter radio on October 16th to ask if Macron had reimbursed the cost of his education at the prestigious École nationale d'administration, Macron responded angrily.

“I was a banker for four years, a civil servant for eight. Before that I studied philosophy. To reduce me to a banker is pathetic . . . what I did for four years in the private sector is very useful for what I am doing today.”