Will Macron’s bet on the French economy pay off?

Emmanuel Macron ’s bet on the French economy is that France’s competitiveness and fiscal solvency will improv e without the use of an internal devaluation, i.e. without squeezing labour costs. For this bet to pay off, the various reforms under way (taxation, labour market, training, education, unemployment compensation) must drive up both France’s product sophistication and potential growth thanks to increase s in productivity gains and the employment rate. The key mechanisms to this bet will be: Additional investment in companies thanks to the tax reform; An increase in youth and labour force skills (thanks to the education and training reforms, jobseeker follow-up and the lengthening of employment contracts); The reduction in corporate social contributions, which is expected to increase the employment rate; The modernisation of corporate capital (thanks to higher profit margins due to the tax reform, and to the increase in skills). A few positive developments are now starting to take shape with regard to : The proportion of long-term employment contracts; Youth unemployment; The employment rate; Automation.