5 Things About the Macron Law

The Macron Law—named after its chief architect, French Economy Minister Emmanuel Macron—is designed to peel away layers of red tape that have strangled the country’s economic growth. In a series of interviews with The Wall Street Journal, Mr. Macron delved into the bill’s many measures. Their impact on France’s economy is though still hard to quantify. One thing is certain: The political impact of the Macron Law has been explosive. Here are five things to know about what’s in the law, and the challenges of getting it adopted.

#1: Kitchen Sink Approach

The Macron Law targets myriad sectors of the French economy that are bound up by special rules. For example, legal professionals such as bailiffs and notaries will have a freer hand in choosing where they want to set up business. Bus lines will be able to operate along routes that compete with state-owned railways. The Macron Law also attacks France’s calcified labor market. One measure would abolish prison sentences for bosses who fail to respect rules on governing negotiations with their employees. Other changes to labor laws would streamline labor tribunals that are a perennial headache to employers, resulting in faster trials and less uncertainty. The legislation also simplifies layoff procedures. Firms that cut jobs at struggling plants would no longer have to negotiate severance packages that draw on the financial strength of a parent company.

#2: Baptism by Fire

This is Mr. Macron’s first attempt to pass legislation, and lawmakers from his own party aren’t giving him an easy time. Even before taking his bill to the floor of the lower house, the 37-year-old economy minister spent 82 hours debating in a parliamentary commission to examine 1,967 amendments, of which 495 were adopted. On the floor, Mr. Macron endured another 111 hours of debate, faced 2,850 further amendments, and adopted 559. Yet that wasn’t enough to unite the fractious Socialist party. At one point, Mr. Macron says he was so worried about the bill’s passage that he considered resigning if it was voted down. “But I think it was not an option, because we have to progress. We have to go further, and we want to deliver,” Mr, Macron said.

#3: Restless Sundays

If passed, the Macron Law will allow retail shops to open a dozen Sundays a year—a radical notion in a country that views Sunday leisure as sacrosanct. To garner support, Mr. Macron watered down parts of the provision, allowing local mayors to decide whether the openings happen on their turf. And only shops in carefully-designated “tourist zones” can remain open every Sunday, all year. In the end, the changes weren’t enough to convince influential Socialist lawmakers who threatened to torpedo the bill, forcing the government to resort to special constitutional powers. “They decided to hijack the discussion of the law because of the political discussion of the Socialist Party,” Mr. Macron said. “They turned the mood into a Socialist Party congress.”

#4: Article 49: The Nuclear Option

Not since 2006 has a French government invoked Article 49 of the constitution. Once exercised, it overrides a scheduled vote in Parliament, passing the bill as if were adopted by the chamber in question. The article also allowed lawmakers to retaliate with a no-confidence motion that, if successful, would have brought down the government. Mr. Macron says he believes the legislation could have passed by a majority of five or six votes, but he didn’t want to risk seeing the bill defeated. “It’s not a denial of democracy and the parliamentary regime; it’s just not dealing with those that deny the reality,” he said.

#5: What’s Next?

As Macron Law heads to the Senate next month, Mr. Macron wants to strengthen its impact on the labor market. Specifically, he aims to expand the use of special waivers—known as Accords de Maintien de l’Emploi—that were introduced last year to allow companies and workers to negotiate more flexible working hours and pay. So far only a handful of firms have bothered using them. Under the current system, any deal a company strikes with its workforce must still comply with France’s 35-hour working week and other nationally enshrined labor rules. Before an agreement is implemented, a company must prove to its employee council that its economic situation is sufficiently dire for the cost-cutting measures. And employees who refuse to accept the terms of the waiver can demand large severance packages, saddling employers with potentially huge costs. Mr. Macron wants to strip away some of these legal barriers. “For me it’s always the same philosophy and it’s what I promote very much: the law is not the right place to say and to write everything,” he said.