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Is Emmanuel Macron’s France in the vanguard of a new economic revolution?

As he delivered his televised address to the French public on Monday night, following a month of street protests and intensifying mob violence, Emmanuel Macron sat behind a gilt-framed antique desk, flanked by a pair of golden lampshades. Behind him loomed one of the imposing golden doors of the Elysee Palace's Salon Dore. Yes, "dore" means golden.

President of the rich? Whatever gave people that idea? Yet appearances can deceive. Despite the Marie Antoinette-style furnishings of the Elysee and the complaints of the gilets jaunes protestors, the statistics suggest the French Fifth Republic is actually a more egalitarian nation than its major peer economies.

According to the World Inequality Database, the share of total pre-tax income flowing to the pockets of the top 1 per cent of people in France is around 11 per cent. That compares with 13 per cent in Germany, 14 per cent here in the UK and 20 per cent in the US.

Post-tax income inequality, as measured by the Gini index, is also lower in France (29 per cent) than the UK (35 per cent) and the US (39 per cent) and roughly the same as in Germany.

The wealth share of the top 1 per cent in France is also well below that of the US. Comparisons with the UK and Germany when it comes to the distribution of wealth are more difficult due to a lack of comparable data but they are likely to be broadly similar.

What about economic performance? The French unemployment rate (9 per cent) is higher than the US (4 per cent), the UK (4 per cent) and Germany (3.3 per cent). Yet average real wages seem to have grown much more in France than in the UK and the US since the financial crisis a decade ago. Here in Britain they are still lower than they were in 2008.

The policies Macron announced on Monday - an increase in the minimum wage, a reduction in the overtime tax, an encouragement for employers to pay workers a Christmas bonus, scrapping an increase in the tax on pensioners - were mainly about putting money in ordinary people's pockets.

According to France's public accounts minister, this package will cost around €10bn (£9bn), or around half of one per cent of GDP. That's not negligible, especially considering the government was hoping to see its budget deficit decline from 2.8 per cent of GDP next year to 2.2 per cent in 2020 and the eurozone's rules define a 3 per cent deficit ceiling.

While Macron's package has been interpreted in some quarters as a "turn to the left", his refusal to reinstate the wealth tax on those with total assets of more than €1.3m, which he scrapped last year, shows there are limits to how far he is prepared to redistribute. He may, ultimately, need to capitulate on that too, just as he has on the new diesel tax, which sparked the recent protests.

The president suggested the unrest has stemmed from "40 years of malaise". That could be interpreted as an attempt to spread the blame after 19 months in office characterised by unforced errors, but there is something in this diagnosis.

While there are those like Marine Le Pen who ascribe the sense of dissatisfaction in France primarily to immigration, a glance at the demands of the (admittedly diverse) gilets jaunes suggests a dominant economic element.

In the wake of the destruction left by the Second World War, France basked in the "trente glorieuses" - thirty years of rapid economic growth and rising living standards for most.

Since the 1980s the rate of both overall GDP per capita growth and productivity growth in France has slowed. It seems to have shifted down again in the wake of the financial crisis a decade ago.

What's ominous for Macron is that this seems to be part of a global trend of slowing economic growth, suggesting it will not easily be turned around by policies in one country.

Defeatism is usually poor counsel and so it remains today. There surely remains potential not just for France, but for all nations, to increase national productivity growth through investments in infrastructure, research and skills. Living standards can be improved not just through redistribution but through a new generation of low-carbon technologies, through institutions that foster a greater sense of economic security, and through governance innovations that enable people and communities to take more control of their lives.

Yet the transition out of malaise is unlikely to be smooth. And if the economic pie is not growing as fast as it was, arguments and tensions about its division are likely to become more intense. Perhaps in this respect, as it was in 1789, France is in the revolutionary vanguard of nations once again.


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