×

France’s Macron could be about to face his defining moment amid fierce protest and plummeting support

  • The recently-elected president wants to make the labor market more flexible to improve the country's economy.
  • However, the issue has always sparked problems with trade unions.
  • Opponents will closely monitor Macron's press conference at around midday local time on Thursday and the president is likely to face resistance.
Emmanuel Macron, France's president, looks on during a news conference in Salzburg, Austria, on Wednesday, Aug. 23, 2017.
Lisi Niesner | Bloomberg | Getty Images
Emmanuel Macron, France's president, looks on during a news conference in Salzburg, Austria, on Wednesday, Aug. 23, 2017.

The French government is to unveil final details of proposed labor reforms Thursday in what is seen as a key plank of President Emmanuel Macron's political and economic strategy for the next five years but also a highly contentious issue inside the country.

The recently-elected president wants to make the labor market more flexible to improve the country's economy. Macron has always advocated that France needs to become more competitive and the reform program became one of his key pledges on the campaign trail. The high costs when both firing and hiring in France are seen as a reason for a lack of investment in a society that has been hit by high unemployment.

However, the issue has always sparked problems with trade unions.

"We will not avoid some little strikes, but this is normal. In all countries around the world there are strikes when you touch labour law," Pierre Gattaz, the president of Medef, a large employment federation in France, told CNBC on Wednesday.

"We have to do that (labor reform). I hope Emmanuel Macron will not fail to do that," Gattaz added, asking for simpler rules from the government.

'One of the most important reforms'

Opponents will closely monitor Macron's press conference at around midday local time on Thursday and the president is likely to face resistance. France's second-largest trade union CGT has already said that it is against the president's idea and is set to call for a one-day strike next month.

The importance of the situation was also underlined by Bruno Le Maire, the French economy minister, who told CNBC Wednesday that this is "one of the most important reforms of the government," adding that it will bring "a huge simplification" to the labor market.

This "will make the life of companies easier so they can create jobs," he said at an event near Paris on Wednesday.

Sensitive time for Macron

The details on labor reform come at a sensitive time for Macron. Despite the momentum and popular support that he tracked after defeating the far-right candidate Marine Le Pen, Macron's popularity has fallen significantly. A poll published by Le Journal du Dimanche showed last Sunday that dissatisfaction among voters rose to 57 percent in August from 43 percent in the previous month.

The current French government has recognized that not everyone is happy about Macron's initiatives, but it's a price the executive is willing to pay to try to change the economy.

Speaking to CNBC on Wednesday, European Affairs Minister for France, Nathalie Loiseau, said "it's important" to go ahead with long overdue reforms and to do it as fast as possible despite any loss in popularity.

"We are fully committed to have this (labor) reform implemented very soon," she said.

"Of course when you come and say 'Well we have to spend less money and we have to balance our budget,' this is not the most popular moment in your political mandate but the sooner the better," Loiseau added.

'More investment in more jobs'

It's not going to be an easy fix for Macron, who will try to appease the trade unions, workers and companies while trying to make the labor market less rigid. But he seemingly has the backing of France's oil major Total, with CEO Patrick Pouyanne expressing confidence about the labor law changes.

"With these reforms people will have the willingness to engage in more investment, in more jobs," he told CNBC Wednesday.

Follow CNBC International on Twitter and Facebook.