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29th Mar 2024

Hollande invokes constitution to force through economic reform bill

  • Article 49.3 of the French constitution gives the government the power to by-pass the National Assembly when it doesn’t have majority support. (Photo: Parti Socialiste)

French president Francois Hollande faced down a mass rebellion by his governing Socialist party on Tuesday, invoking a seldom-used procedure in the French constitution to force through a controversial bill aimed at liberalising the French economy.

After the Socialist’s majority in the National Assembly appeared to be melting away, Hollande used article 49.3 of the Constitution, which gives the government the power to by-pass the National Assembly when it doesn’t have majority support.

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The disputed bill, drafted by economy minister Emmanuel Macron, a former merchant banker and economic adviser to Hollande, takes aim at a number of ‘sacred cows’ to the French left.

It includes plans to liberalise Sunday trading, speed up the settlement of disputed sackings, and increases competition in the legal profession.

The bill will now go directly to the French Senate for a vote, unless Hollande decides to use Article 49 again.

Prime minister Manuel Valls defended the move, telling French television on Tuesday (17 February) that “authority is needed to put the country back on track”.

“I won’t take the risk of a project that I consider essential being rejected,” Valls told deputies in a speech announcing the decision to use the emergency measure.

Benoit Hamon, who Hollande sacked as education minister in August, told French media on Tuesday that he would join those voting against the Macron law.

The assembly can only oppose the law by toppling the government through a motion of no confidence.

The procedure was last invoked in 2006 by conservative President Jacques Chirac in an attempt to reform the labour market.

The dramatic move comes less than two weeks before the European Commission decides whether it has taken sufficient action to balance its books and revamp an economy that has grown by an average of 0.4 percent over the past three years.

The EU executive gave Hollande a three month stay-of-execution last November, warning that failure to implement further spending cuts to reduce its deficit could lead to sanctions which could, theoretically, amount to 0.2 percent of GDP.

France has been singled out as the main laggard in implementing the EU's revamped economic governance rules, having been given a two year extension to bring its deficit below 3 percent by 2015, only for Sapin to announce this summer that the target would not be reached before 2017, four years later than initially forecast.

The 2015 budget proposed by finance minister Michel Sapin sets out a programme of spending cuts worth €50 billion over the next three years, which will offset payroll tax cuts for businesses worth €40 billion in a bid to incentivise firms to hire more workers and reduce the unemployment rate.

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