Analyst: Macron's Measures Are Disproportionate to Seriousness of Crisis

On top of that, the press and a number of economists reminded of the need to replenish another 4 billion of the funds that were lost as a result of the abolition of the increase in the environmental taxes on fuel.

Jean-Michel Naulot, a former board member of the Financial Markets Authority (l'Autorité des Marchés Financiers (AMF), commenting on economic measures, in particular on raising the SMIC, announced on Monday 10 December by French President, has shared his assessment in an interview with Sputnik: "Macron has very cleverly formulated it — in reality, the allowance is rising, and not the interprofessional minimum hourly wage. These are different things, since as the latter rises, the size of the future pension increases, and when the subsidy increases, this does not happen…"

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The expert has expressed his doubts about the benefits of tax exemption for overtime work as he talked about some measures taken by the government that were not mentioned: "This is a good decision, but then overtime work should be paid, and this is not always the case. [However], nothing was said about the recently adopted unpleasant measure. In 2019-2020 there will be no indexation of pensions with regard to inflation. Inflation keeps at the level of 1.5% and, accordingly, the purchasing power falls, this is a very important point. In my opinion, the above measures are disproportionate to the seriousness of the crisis. This is not a one-time social protest, as happens in the case of a major strike. "

In addition to the "very serious mistakes" made by Emmanuel Macron at the beginning of his presidency, particularly in the information policy, Naulot has named two other causes of the crisis in France: "We are still feeling the 2008 financial crisis. For 10 years, the purchasing power has not increased, and among representatives of some segments of the population, it has even decreased."

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Referring to the Organisation for Economic Co-operation and Development statistics, he has argued that the euro has adversely affected the industry in many countries thus propelling the de-industrialisation process, which is creating problems for all regions: "In Germany, industrial output increased by 35%, [while] in France it decreased by 10%, and in Italy by 17%", he stressed.

However, the expert has agreed that even half measures can cause problems with the European Commission: "If new tax measures or public spending cuts are not announced, the budget deficit will go from 3 to 3.5%", Naulot said.

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A budget deficit below 3% may not suit the European Commission. In his opinion, it is imperative to "change the approach" at the EU level and "allow states to breathe".
"In recent weeks, Italy has been reprimanded for the fact that it declares a budget deficit of 2.4% for the next year but it will be much higher here, not to mention that the French budget deficit is real, while Italian is associated with interest payments on loans. Since the introduction of the euro, Italy has always had a primary budget surplus, before interest payments."

According to Jean-Michel Naulot, Emmanuel Macron should "most seriously respond to the crisis" and change his personal attitude to the concept of Europe.
"He is in favour of the European concept of the previous generation, which led to some mistakes. I believe that the French, like the Italians and other peoples of Europe, feel European, but they recognize the need for EU development. Three out of four Frenchmen don't want to hear about [European] federalism but they don't feel less European because of this", the expert concluded.

The views expressed in this article are those of the speaker and do not necessarily reflect those of Sputnik.