Civil unrest in Macron's government will act as an additional - though minor - drag on growth in 2023

The government will need to consider ways to calm unrest after it pushed through the bill without a parliamentary vote

The pension reform bill that was pushed through by President Emmanuel Macron’s government will be implemented gradually. Consequently, MNCs can assume it will have an incremental but positive impact on the budget deficit. Downward pressure on the deficit should help keep borrowing costs affordable, supporting the investment climate and, by extension, B2B demand. 

However, it’s not all good news. MNCs should plan for ongoing economic disruption from protests and strikes this spring. This could encourage firms to temporarily delay investments until the situation settles. B2C MNCs could also see a small impact on demand due to strikes that impact consumers’ travel plans or access to goods and services.

Finally, MNCs can expect a period of uncertainty as Macron considers the prospects for future legislation and whether to initiate a government reshuffle. Domestic demand will soften somewhat, but we continue to expect economic activity to pick up in the second half of the year.


  • On March 16, Macron’s government avoided a parliamentary vote on its highly contentious pension reform bill and pushed it through using clause 49.3 of the constitution. However, this meant opposition parties then had an opportunity to submit votes of no-confidence in the government.
  • On March 20, the government narrowly survived two such votes. As a result, the pension age is now set to rise from 62 to 64, with the minimum number of years of work required to claim a pension also rising to 43 years.
  • This has sparked strikes and violent protests, which we expect will continue in the coming weeks, creating a period of uncertainty as the government considers its options for quelling the widespread discontent and the prospect for the rest of its legislative agenda.

Our View

Although Macron’s government survived both no-confidence votes, it won’t be smooth sailing going forward. The first vote, which was proposed by a small left-wing group called Liot, only fell short of succeeding by nine votes. This is a smaller margin than anticipated due to the fact that more members of the center-right Republicans broke with the party line to vote in favor of the motion. This suggests the new leadership of the Republican party has failed to heal rifts within the party, which could make them an unreliable partner for passing future legislation. Admittedly, the second no-confidence vote passed with a much larger margin, but this is due to the fact that it was tabled by the far-right National Rally, which many parties refuse to cooperate with.

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