Thursday, August 7, 2014

The Conseil Constitutionnel and the Pacte de Responsabilité

François Hollande managed to impose his Pacte de Responsabilité on a recalcitrant majority but apparently not on the Conseil Constitutionnel, which, while approving the cut in corporate social charges, rejected the accompanying reduction in social charges on lower-paid employees, which was supposed to sweeten the bitter pill. The CC argues that the skewing of rates to favor less well-off workers violates "the principle of equality," although one might equally well argue that it was intended to support that principle. But the law is as the law does, and the government must now live with the CC's obtuse interpretation of equality, which is likely to make a measure already unpopular (to put it mildly) with its electoral base even more repellent.

The Responsibility Pact makes a certain amount of economic sense, even if one can argue about its likely effectiveness. But the government must now find another sweetener for its package or risk even further erosion of its support.

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