France: here we go again

French unions rally against pension reform and austerity. Prime Minister Lecornu, lacking a majority, faces tough choices and political turmoil as well as the street protests…  unions remain too weak to force change

The key points: French trade unions organised action on October 2nd to pressure Prime Minister Sébastien Lecornu to reverse austerity measures and the retirement age increase from 62 to 64. Union leader Marylise Léon demanded "fiscal, social, and ecological justice" in the budget, though French unions remain weak with only 5% private sector membership concentrated in traditional industries.

Lecornu lacks a parliamentary majority following Macron's snap election that fragmented the National Assembly into far right, far left, and centrist blocs. Previous prime ministers Barnier and Bayrou failed to pass budgets under these conditions, making Lecornu's success unlikely.

Why this matters: French political fragmentation creates governance paralysis that prevents necessary economic reforms while maintaining unsustainable spending commitments. The country faces the fundamental problem of wanting to maintain high public spending without corresponding economic growth to support it. Weak union industrial leverage means street protests indicate weakness rather than strength in forcing policy changes.

What might happen next: Continued political instability seems likely as France struggles to reconcile its economic realities with political demands. The government will probably continue operating without a stable majority, making significant policy changes difficult to implement. Economic pressures may eventually force more realistic approaches to public spending regardless of political preferences.

What you should be doing: Companies operating in France should prepare for continued political uncertainty affecting policy stability and economic conditions. Monitor developments in French fiscal policy that may impact taxation, labour regulations, and business operating conditions. Consider the implications of French economic instability for broader European market conditions and supply chain planning.