A former banker, Macron was the economic adviser to Hollande until June 2014 and the main architect of the important reforms passed in the first two years of Hollande’s mandate, including the CICE and the Responsibility Pact. He also was behind Hollande’s New Year’s speech clarifying the social democrat positioning of the president. Before that, he was involved with M. Sapin in shaping Hollande’s economic campaign platform. He also worked with JJ Attali under President Sarkozy on a milestone report on the liberalisation of goods and service markets in France.
According to Barclays analysts, “this nomination is a very strong political signal, meant to put an end to the confusion about economic policies that has prevailed until now, and that it will help to speed up the reform process. It is also fully consistent with the social democrats’ economic strategy that President Hollande developed in an interview with the daily Le Monde, on August 20. However, it will not make it easier for the prime minister to secure support on the left, which entails quite some risk.”
The newly unveiled French government, the third under Hollande’s mandate, contained only a few surprises. As expected, the “rebel” ministers Arnaud Montebourg (Minister of Economy) and Benoit Hamon (Minister of Education), who publicly criticized the economic policy strategy, as well as Aurelie Filippetti (Minister of Culture), have been ousted. They have been replaced respectively by Emmanuel Macron, Najat Vallaud Belkacem and Fleur Pellerin, while the other 13 ministers remain unchanged.
France to regain credibility vis-à-vis its European Partners
“At the European level, the reshuffle is important, as it allows Hollande to have a team that does not criticize European policies and Chancellor Merkel. France should be able to clarify its voice and weigh more in the debate over fiscal policy coordination and institutional reforms”, expain Apolline Menut and Fabrice Montagne, analysts from Barclays.
“Hollande and Italian Prime Minister Matteo Renzi are likely to call for a flexible approach to the Stability and Growth Pact, given the risk of renewed recession in Europe. In addition, Hollande’s call for policies aimed at supporting demand at the European level supports European Commission President Jean-Claude Juncker’s proposal to launch a EUR300bn public investment programme. It is also consistent with the proposals put forward by Mario Draghi in Jackson Hole last week.”