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Macron promises Nordic remedy for France's economic ills

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Macron promises Nordic remedy for France's economic ills
Photo: AFP
17:49 CET+01:00
After coming under fire for being vague and secretive, centrist En Marche! candidate Emmanuel Macron has finally unveiled his economic programme for France, or at least part of it.

Macron has been under pressure to reveal more of his plans to turn around the stagnant French economy.

A day after he announced a surprise pact with fellow centrist François Bayrou, Macron set out some of his economic plans for France if elected, which include cuts to public spending, while at the same time plowing €50 billion into the economy.  

"We need to invent a new growth model," Macron told Les Echos newspaper. "To be fair and sustainable it must be environmentally friendly and increase social mobility."

Here are some of the main points to pick out from his plans.

  • Macron wants to cut corporate taxes to 25 percent, down from the current 33.3 percent.
  • He also wants to cut 120,000 civil servant posts, 70,000 of these positions would be from regional and local authorities and 50,000 from the central state. Macron says that unlike François Fillon, who wants to cut 500,000 public sector jobs, he doesn't "believe in a purge and in fixing the country against the people's will".
  • Macron does however plan to cut public spending by €60 billion, again that's less than Fillon's plan to make savings of €100 billion over five years. Macron's €60 billion savings plan would be to cut €25 billion from central government, €15 billion from the government's health insurance scheme, €10 billion from unemployment benefits and another €10 from local authority spending.
  • The En Marche! candidate also believes he can bring unemployment down to 7 percent from the current 10 percent, saying it seemed “reasonable” to do this by 2022. Macron talks of reforming labour laws, making negotiations between unions and bosses less centralised, meaning companies would have more power to negotiate with workers over pay and hours.
  • Taking aim at France's generous unemployment benefits system, he said he would withdraw payments for people who twice turned down jobs that they were qualified for. "I want a system of rights and responsibilities," Macron told RMC radio. But he also vowed to extend benefits to entrepreneurs and the self-employed.
  • And calling for "flexibility" in the jobs market Macron defended jobs created by companies such as Uber which do not come with a full-time contract and employment rights, saying: "Let's get away from this French preference for unemployment."I'm in favour of there being flexibility but I also demand protections," he added.
  • Improve relations with Germany, EU's leading economy, by carrying out reforms and agreeing to keep to EU budget restraints which means getting the budget deficit below 3 percent of GDP.
  • In return, he hopes Berlin will allow an increase in the EU's capacity to invest. “If we don't have a brave plan of structural reforms, the Germans won't follow us,” he told Les Echos. 

A look at what a 'President Emmanuel Macron' has in store for France

  • Macron is also promising a massive public investment plan worth €50 billion - including €15 billion for training young people and another €15 billion for green energy transition. Other priorities include modernizing public administration, farming and local public transport.
  • Cut taxes equally between households and businesses by €20 billion to help boost spending power and investment.
  • Get rid of the taxe d'habitation - (a residence tax, paid for by anyone living in a property, whether you're the owner or just renting it) for 80 percent of the population.

Mathieu Plane, a senior economist at the independent French Economic Observatory at Sciences Po university in Paris, said the proposals positioned Macron between his rivals.

Leftist candidates Jean-Luc Melenchon and Benoit Hamon as well as far-right leader Marine Le Pen have pledged new public spending initiatives, while conservative rival Francois Fillon is promising a dose of austerity.

"Macron has positioned himself as a relatively moderate alternative," he told AFP.

Erik Nielsen, an analyst at banking group UniCredit, said he liked the measures, reflecting the financial markets' generally favourable opinions of the former investment banker.

"It's close to the Scandinavian model, which has worked very well," he told AFP.

A new poll published late Thursday showed Macron gaining momentum following his alliance with fellow centrist Francois Bayrou which was announced on Wednesday.

The poll by Ifop-Fiducial showed far-right leader Marine Le Pen winning the first round with 26.5 percent and Macron coming second with 22.5 percent, ahead of conservative Francois Fillon on 20.5 percent.

Le Pen and Macron would then go head-to-head in a run-off on May 7 which Macron would win by 61 percent to 39 percent if it were held today, the poll forecast.

But the election remains highly uncertain, with analysts cautioning against predictions after a series of surprises in France and abroad that have wrong-footed observers.

READ ALSO: A look at what a 'President Emmanuel Macron' has in store for France

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