📈Weekly Dispatch - Deferred stability
📈Weekly Dispatch - Deferred stability
26 March 2023 - The Pension reform goes to the Constitutional Council, France is expected to avoid recession, the royal visit is postponed, and we're strengthening Franco-Algerian cooperation
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This week
🔎Pension reform goes to the Constitutional Council
📈France expected to avoid recession
👑Royal visit postponed due to protests
🇩🇿Strengthening Franco-Algerian cooperation
🔎Pension reform goes to the Constitutional Council
The Pension reform bill has made it through the parliamentary process in incendiary fashion, and President Emmanuel Macron announced on Wednesday 22 March that he hopes the reform will come into force at the end of the year.
However, there’s one catch, a potential barricade if you will, that could prove problematic: the Constitutional Council.
With the country currently sitting on top of a political crisis dividing our concitoyens, there are multiple attempts to get the Constitutional Council to give a verdict on the legality of the pension reform.
Prime Minister Elizabeth Borne, the Rassemblement National and the NUPES coalition have both called upon the Constitutional Council from the Assemblée National, and from the Senate the Left have done similarly.
Now, the Constitutional Council have a month to declare whether the content of the text and/or the manner in which it was debated was in line with the constitution and will be the ones who either swing the axe or shelve it definitively.
Let’s hope the government’s sherpas were doing their jobs properly and not playing politics.
The NUPES hope “to censor the whole of the text”, claiming that the procedures invalidate it, particularly by amending the Social Security Financing Act (PLFRSS) and using Article 47.1 to limit parliamentary debate to fifty days.
They also claim that the “insincerity” of the information that the government provided, as well as examples within the text that don’t fall within the scope of the PLFRSS,
These arguments are shared by the far-right, with the only addition in the Rassemblement National call upon the Constitutional Council being that the law contravened Article 34 of the constitutional, which states that:
“Social Security Financing Acts shall lay down the general conditions for the financial equilibrium thereof, and taking into account forecasted revenue, shall determine expenditure targets in the conditions and with the reservations provided for by an Institutional Act.”
We even teach French law here at The French Dispatch. What. A. Bargain.
There is reason for concern within the French government, however. Jean-Philippe Derosier, a professor of law and constitutionalist, recently spoke to Le Monde and explained that the PLFRSS “is a vehicle which was not initially imagined to carry out this type of reform”.
However, only time will tell what the constitutional council will say, so stay tuned to your favourite newsletter for information!
📈France expected to avoid recession
So good news, everyone: France should avoid recession in 2023.
François Villeroy de Galhau, aside from having potentially one of the most French names I’ve personally heard as a Frenchman, also happens to be the Governor of the Bank of France and gave us the good news on Monday.
According to the governor, the initial projection of 0.3% growth has been revised up to 0.6%, with inflation expected to fall to 5.4% in the second half of this year.
The main goal of the Banque de France, in line with the European Central Bank’s plan, is to bring inflation back down to 2% by either the end of 2024 or 2025.
He also addressed the ongoing concerns within the banking sector, letting the public know that the situation with Silicon Valley Bank (SVB) and Credit Suisse aren’t expected to be replicated in France.
He noted that Credit Suisse is “a bank which for several years had had a problem with its business model and profitability, and which suffered from insufficient internal controls” and that SVB suffered from a lack of regulation and supervision.
Neither of these afflictions is affecting the French banking industry, notably due to the correct application of the Basel III rules (which I invite you all to read about)
👑Royal visit postponed due to protests
In news that will make royalists very sad, King Charles III postponed his visit to France due to the ongoing protests, instability and violence related to minor disagreements on pension reform.
Boo hoo.
More seriously though, the King’s visit, and the probable King’s speech, was intended to be the next volley in the post-Brexit reconciliation between France and the United Kingdom, initiated with the positive meeting between President Macron and the British Prime Minister, Rishi Sunak.
The plan was to have dinner at Versailles between Macron, his wife Brigitte, King Charles and the Queen Consort Camilla, a walk around Paris, a speech at the French Senate, and finally, a trip to Bordeaux on the TGV.
However, the reality is that just about every single part of this trip would have been disturbed in some way, shape, or form by the protests. The opposition would have made the most of the trip to cause as many political problems for Emmanuel Macron as possible.
The goal of the opposition being to tarnish the positive image President Macron has internationally to apply additional pressure on domestic matters.
🇩🇿Strengthening Franco-Algerian cooperation
And to cap off the week, we have more good news!
Not only are efforts being made to strengthen the Franco-British relationship, but the Franco-Algerian relationship is also receiving some reinforcement.
In a joint announcement following a phone call this Friday, President Macron and Algerian President, Abdelmadjid Tebboune, announced their wish to “strengthen [bilateral] cooperation” following the recent “misunderstandings” around Franco-Algerian activist Amira Bouraoui.
Baraoui, who was banned from leaving Algerian territory under a two-year jail term for “offending Islam” and insulting the president, illegally crossed into Tunisia, was arrested attempting to board a plane to France and has since been accused of being a member of the French intelligence services in certain conspiracy theories.
Helped out of Tunisia by French intervention, this caused additional tension between France and Algeria, which led to both presidents Macron and Tebboune agreeing to “strengthen the channels of communication … to prevent this type of regrettable misunderstanding from happening again"
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