In working class Paris suburb, 'Macronomics' falls flat

By Reuters/Michel Rose   October 18, 2017 | 07:09 pm PT
In working class Paris suburb, 'Macronomics' falls flat
French President Emmanuel Macron speaks to children as he visits a day care center as part of a plan to fight poverty for children and youths in the country, in Gennevilliers, near Paris, France, October 17, 2017. Photo by Reuters/Michel Euler/Pool
Macron launches anti-poverty plan after cutting wealth tax as critics say his policies are akin to "trickle-down economics."

In Gennevilliers, a communist-held suburb on the Paris outskirts, President Emmanuel Macron's promises to help the poor are met with scorn.

It was in this drab working-class neighbourhood that the former investment banker launched his anti-poverty plan this week as he struggles to shake off the tag of "president of the rich".

Unemployment here is above the national average and one in four people live in poverty. Macron pledges to overhaul professional training to get the jobless back to work quicker. He has also announced increased disability allowances, a revamp of social housing, and the phasing-out of an unpopular housing tax.

Yet his plans to assist poorer households have been eclipsed by reforms widely perceived as favouring the rich and investors, including the scrapping of a wealth tax and a cut in corporate tax.

Nathalie and Pascal Dilard were forced to give up their flat after they lost their jobs. With their teenage son, they now reside with Pascal's elderly parents, living off 400 euros a month.

"Anti-poverty? I'm sorry, but when I see our situation, that makes me laugh," Nathalie, 50, said as anti-riot police pushed back protesting unionists during Macron's visit.

"My problem with him is that he helps the rich, not the little people like us. We can just die," she said.

Six months into his presidency, Macron, 39, is moving fast with his drive to re-shape France's social and economic model.

That has won him praise from international investors, euro zone allies and billionaires such as Bernard Arnault, the head of luxury giant LVMH, who say his pro-business policies will win new investments and create jobs.

But in a country whose "soul is equality", as former president Francois Hollande once said, and whose tax and welfare systems have produced lower levels of inequality than in Britain or the united States, Macron's reforms have angered left-wing opponents, unions and workers.


Commentators have likened Macron's policies to the "trickle-down" economics espoused by former U.S. president Ronald Reagan and Britain's Conservative prime minister Margaret Thatcher. They believed tax cuts for the rich would benefit the poor through increased consumption and investment.

Macron on Sunday rejected trickle-down economics, opting instead for a rock-climbing analogy whereby he wanted "lead climbers" to be strong enough to haul up those behind.

The measures planned for the next five years will increase the living standards of the poorest 10 percent by 2.1 percent, while the richest 10 percent will be 1.2 percent better off by 2022, according to a French Treasury study.

The only segment of the population that will be marginally worse off is the upper middle class, it said.

But according to the OFCE economic think-tank, that will translate into a 700 euros per year income increase for the richest 10 percent, while the poorest 10 percent will be less than 200 euros better off.

Former Harvard university economist Philippe Aghion, who helped shape Macron's economic programme, said "Macronomics" was more akin to the Scandinavian model because of the place given to state investment in training and education.

Nonetheless Macron's reforms have re-ignited the debate about redistribution between rich and poor and reveal a weak public confidence that the measures will bring investments beneficial for the whole economy, said the Eurointelligence think-tank.

"You will never motivate the French people with 'competitiveness'. "You will always motivate them with 'grands projets'," said economist Christian Saint-Etienne, referring to large-scale undertakings such as France's post-war state investment in high-speed trains, planes and nuclear plants.

In Gennevilliers, two retirees bemoaned Macron's intention of increasing a social welfare tax on pensions.

"My husband worked 50 hours a week from the age of 15. And now they tell us you pensioners are getting too much in retirement!" said one of them, 63-year-old Lisianne Jouvenaux.

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