Media365
Street protests in France over the last few weeks paint a stark picture. In schools across the country, students — joined by teachers, parents, nurses and other sections of society — forced closures and clashed with the police. Their demands sound unexceptionable: Better infrastructure and teaching, updated curricula, and equality in the quality of education and access to universities. At least 7,000 protesters have been detained; many have been injured, including police officers. Six months ahead of the presidential election, the government has promised 3,000 additional substitute teachers, and education is one of the few government departments not facing funding cuts. Look closer, though, and a deeper crisis in the French political economy becomes apparent, one that the minority Emmanuel Macron government seems ill-equipped to resolve.
At 3.5 trillion euros (nearly 120 per cent of GDP), France’s debt is among the highest in Europe. Investors are offloading national bonds, which has raised the cost of borrowing. It is also a clear signal from the markets that the fiscal situation needs to be brought under control. A large part of the problem is demographic and structural. In education, in real terms, budgetary allocations have grown by 14 per cent over the last decade. However, much of that has gone to paying out pensions, often at the expense of teachers’ wages and infrastructure. In fact, pensions account for 13-15 per cent of the country’s GDP. In 2023, the government sought to raise the pension age to 64, but backed down after widespread protests.
Macron rode to power, at least partly, on the promise of reform and reviving investment and industry. In the last months of his second term, he is all but running a lame-duck government and seems to lack both the will and the political capital to take the hard decisions that the country needs at the moment. Both the far-right National Rally led by Marine Le Pen and the left-wing LNF led by Jean-Luc Mélenchon seek to make political gains from the moment: The former promises budget cuts on top of a nativist narrative, the latter a utopian welfare state. The centre, it seems, has no advocate. Beyond the politics of the moment and the upcoming French election, the crisis is also a warning for several old democracies: An ageing population, a shrinking tax base and the inability to craft a political language and economic policy to address the contradiction is a recipe for instability.
