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The President of the Republic, Emmanuel Macron, here at the Elysée Palace, during the signing of ordinances reforming the labor code.

Liberal and populist at the same time, because it takes everything to make a world. The Head of State wants to distance himself from the German Bismarck to team up with the Briton Beveridge.

Sometimes journalists ask scholarly questions. “You want to move from the model of social “insurance” known as “Bismarckian”, financed by contributions, to the model of solidarity via taxation, known as “Beveridgian”…”, question the service dockets. To which Emmanuel Macron replies: “Exactly.” As for the reader taken aback by this dialogue at the top, he remembers the famous formula of Woody Allen: “The answer is yes. But what was the question?"

The question is about social protection systems. The Head of State therefore wants to distance himself from the German Bismarck to get along with the Briton Beveridge, we can guess.

The “iron chancellor”, not content with waging war on France and winning it in 1870, had created, ten years later, a complete system of social protection, a world first. Focusing on the three “risks”, illness, accidents at work and old age, its principle was that of insurance, with contributions based on the salary. For Otto von Bismarck, it was a question of pulling the rug out from under the feet of the socialist movements, of improving social dialogue at company level for the greater good of German industry.

 "Sickness and unemployment are no longer personal risks against which one insures by the contribution on work, which was the basis of the 1945 contract"

Emmanuel Macron

In the middle of World War II, the British government of Winston Churchill asks the economist William Beveridge for a report on health insurance. Which advocates in 1942 a system based on the "three U", universality (all the population), uniformity of benefits, unity of management by the State and financing by tax.

French social security established by ordinances in 1945 was inspired more by Bismarck's “insurance” system than by Beveridge's “assistance”. Emmanuel Macron therefore intends to break the balance of 1945 on the pretext that "sickness and unemployment are no longer personal risks against which one insures oneself by the contribution on work, which was the basis of the 1945 contract. These are societal risks that justify national solidarity. They must therefore be financed by taxes, the CSG, and not by contributions on work”.

In doing so, one has the impression that the Head of State does not fully grasp the scope of what a tax is: “A compulsory payment, without consideration, to public administrations” (INSEE definition). With the taxation of “unemployment insurance”, there will no longer be any reason for the executive to receive compensation higher than that of the minimum wage. However, the contributions paid by companies will remain, also based on the salary, which could justify a modulation of the allowances... Incidentally, it is strange that the government perpetuates the myth of "employee contributions" which would be of a different nature than "company contributions", whereas it is the same thing: both enter into the salary cost for the company and they reduce the employee's net salary in the same way.

“Furious craftsmanship”

Unemployment insurance reform which will be discussed in October can only lead to a baroque device. Especially since, not content with abandoning Bismarck in favor of Beveridge, "Emmanuel Macron prefers to approach the Danish model in which the unemployed, who remain mobilized on the return to work, keep important rights", explains to the JDD Jean Pisani-Ferry, the former campaign economic adviser to presidential candidate Macron.

Last level of complication, the government intends to introduce an American-style bonus-malus, in which the companies which lay off workers or have the most recourse to short contracts pay more contributions. All this starts from the rather naive idea that it would suffice to borrow the best from foreign experiences to arrive at an optimal system. Fake. “Ask a commission to draw a horse, and a dromedary will come out of it”. Such is the risk of ideological tinkering for lack of a strong idea. In terms of public finances too, we are witnessing a kind of “furious craftsmanship”. Thus Emmanuel Macron rightly criticizes the short-termism of previous governments. "We are a country of meteorologists: we look at the situation and as soon as things get better, we shouldn't ask for any more effort" (interview with Point). However, this is what will happen for the 2018 budget: on the pretext that economic growth could be stronger than expected, the government has decided to make less savings in public spending than it had envisaged. at the beginning. The reverse would have been relevant.

Such an approach is humiliating vis-à-vis our neighbors in the eyes of whom we appear as the bad student who tampers with the results (deficit indicators). “In France, we have neither winter, nor summer, nor principles, but apart from these three disadvantages, it is a beautiful country”, claimed the American humorist writer Mark Twain. A country that will organize the Olympics in Paris in 2024, could add Emmanuel Macron, who knows about populism. Housing tax exemption for the most part, the abolition of unemployment contributions "which will represent more than 250 euros per year at the level of the minimum wage": the presentation he gives of his action maintains the fiction according to which the State would create wealth and the power of purchase. This is the zero degree of argumentation in matters of economic policy.

It is true that the "macronomics" have no apostles to popularize the salt here or there. The Élysée has no economic adviser in the sense that President John Kennedy had John Galbraith, the great theoretician of the "affluent society" at his side in the White House (we were in the early 1960s). It is also true that one cannot imagine Pic de la Mirandole surrounding itself with other eggheads.

Source: ©  Le Figaro Premium – “Macronism”, do-it-yourself made up of odds and ends, and proud of it

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