17 February 2015

Financial Times: French government overrides parliament to ram though reforms

The move underlined Hollande’s determination to implement reforms intended to kick-start France’s sclerotic economy and which have been demanded by his European partners as the price for delaying the reduction of the country’s budget deficit.

French president François Hollande took drastic action February 17 to ram through a package of business-friendly economic reforms, overriding parliament to stamp out a rebellion within his own ruling Socialist party and avert a government crisis.

But the resort to a rarely used constitutional instrument to pass the law also signalled the weakness of his own government. It was unable to rally a majority in the National Assembly because of dissent by several dozen Socialist party leftwingers opposed to austerity and the deregulation package.

The lack of parliamentary support for flagship measures is likely to ring alarm bells in Berlin and Brussels as concerns grow that the political tide in the eurozone, led by Greece, is turning against essential economic reforms and tough budgetary discipline.

The centre-right opposition UMP party led by former president Nicolas Sarkozy said it would call a vote of confidence in response to the emergency action. Mr Hollande was gambling that the Socialist rebels would fall back into line in a confidence vote to ensure the survival of his government.

The drama erupted only weeks after Mr Hollande had seen his previously record-low popularity surge after the Islamist terror attacks in Paris last month in which 17 people died in assaults on the satirical magazine Charlie Hebdo and a kosher supermarket.

When it became clear on February 17 that Manuel Valls, the reformist prime minister, could not be certain of winning a vote on the reform law, Mr Hollande convened an emergency ministerial meeting at the Elysée Palace. 

He gave the greenlight to Mr Valls to use Article 49.3 of the French constitution, which allows a government to pass laws without a parliamentary vote.

“A majority may exist for this bill, but it is not certain,” Mr Valls told lawmakers. “I will therefore not take the risk of a rejection. (..) Nothing will make us move back, in the best interests of the French.”

The use of Article 49.3, last used nine years ago, means the package of law put together by Emmanuel Macron, the 37-year-old economy minister, will automatically pass unless the government is ousted in a no-confidence vote.

© Financial Times