Hollande, Valls, Macron and Article 49-3: France Tries Harder to Reform

03/18/2015 02:23 pm ET | Updated May 16, 2015

French country-wide local elections will occur next week in which president François Hollande risks another disavowal by the people. Marine Le Pen's nationalist National Front party will probably win the most votes as it did in European Parliament elections last year. France has deserved better presidential leadership than the complacent Hollande but he may have finally chosen the road of courage.

If changes in top leadership indicate a change of direction, Hollande is now serious about unpopular economic reforms to get the French economy off life support, which means to give prosperity a chance. Manuel Valls' appointment as prime minister in 2014 showed Hollande realized his natural bent for dancing around ineffectually was played out. Bringing on his old friend, advisor and ex-Rothschild banker Emanuel Macron as Economics Minister a few months ago gave Valls a strong partner to face off Hollande's leftwing parliamentary majority and entrenched interest groups in society. Perhaps shaming finally worked. In any case Hollande has boxed himself in for the better: it's now two to one at the top.

The first evidence of spine occurred a few weeks ago when the government used the strongest weapon in the French Constitution, Article 49-3, to push through the pro-business "Macron Law" by making it a question of confidence in parliament. With some votes from conservatives counter-balancing defections from the president's Socialist party, the government won the vote, which meant bypassing the National Assembly and sending the bill directly to the Senate, which will debate it in April. The Macron reforms are small potatoes in terms of what is necessary but the rough-house tactic showed political will. Using 49-3 means the Hollande-Valls-Macron trio will bang a few heads together, among them notable anti-private sector ideologues in the Socialist majority such as Arnaud Montebourg.

This is nick-of-time politics. France, internationally humiliated, is an at-risk economy that ill-serves the people. Economic growth is zero and foreign direct investment has fallen by 94% over the past decade. Macron and Valls are trying to convince international companies that France, despite Hollande, will be a good place to invest. It's understood that this requires lower taxes on business and less rigid job protection in a bet on more hiring, a bargain that goes against the grain of secular populist anti-capitalism. But unemployment is still over 10% and it has risen steadily rather than declined over Hollande's term despite his commitment to make reducing unemployment his first priority. Using France's traditional statism, i.e. government activism, hasn't worked yet again. Youth unemployment is 25% in spite of government subsidies of 150,000 jobs, called variously "Contract between the generations" or "Contract for the future" with acronyms only the job-seekers remember. In the larger scheme they are diversions. The economic/financial situation of France's young people is profoundly demoralizing. They are the future and they've been emigrating somewhere else for years (London, the U.S., even Australia and a few East Asian countries such as Vietnam). No ambitious, educated young person thinks of moving to France to become an entrepreneur. France's economic immigrants are unskilled and under-educated.

Successive governments, having run French prosperity into the ground, deserve their bad reputations. As Germany's Angela Merkel commented, getting the Macron Law through the parliament using the unorthodox 49-3constitutional maneuver "shows France has the ability to act." This was patronizing but no one said it was wrong. Charles de Gaulle must be turning over in his grave.

France would doubtless benefit if Hollande didn't run for re-election in 2017, making way for someone with different instincts and more gravitas. He personifies the leftwing obliviousness that re-emerged after François Mitterrand's semi-heroic presidency, 1981-1995. Hollande has no political vision, no conception of what a successful French economy would be. No one thinks him a paragon of honesty and integrity, which means that few still want to give him the benefit of the doubt. His popularity bounced for his heart-felt performance at the time of the terrorist attacks in Paris last January and his military action against jihadists and other insurrectionists in Mali and the Middle East. But Hollande is no Mitterrand, which means in part that his amoral side is not compensated by Machiavellian shrewdness.

France needs a decisive president with a sense of urgency and a capacity for statesmanship. Both require a willingness to be "more confrontational" at home, as Macron says, and more forceful abroad. 2017 is down the road but imagining Valls as presidential candidate with Macron as likely prime minister gets the blood circulating a bit. It would amount to passing the torch to a new Socialist generation, capable of defeating either a conservative such as former president Nicolas Sarkozy or the nationalist Marine Le Pen. Whereas imagining an electoral debate with the articulate, self-confident Le Pen would keep Hollande awake at night.