September 17, 2014 / 10:59 AM / 3 years ago

France's Hollande heads for showdown over job deregulation drive

PARIS (Reuters) - Thousands of French “notaires” held what they said were their first-ever street protests in Paris and Marseille on Wednesday to challenge plans by President Francois Hollande to deregulate their activities.

A notary wearing a sweatshirt reading "Notary made in France" demonstrates during their first-ever public protest against a plan to chip away at rules shielding them from competition in Marseille September 17, 2014. REUTERS/Jean-Paul Pelissier

Anger at Hollande has driven everyone from medics to taxi drivers onto the streets in recent months but few can have expected to see the well-heeled equivalent to Britain’s solicitors or U.S. notaries public on the march.

Notaires typically take home a net 13,000 euros ($17,000) a month and are better known for their gilded offices and iron-clad professional status than for demonstrations.

Surveys show that Hollande, deeply unpopular over his failure to revive the euro zone’s second largest economy, has broad public support for his plan to deregulate their activities and those of 36 other professions in France: pollster Odoxa last week found a full 78 percent of French in favor.

But he will nonetheless have to brave fierce resistance from the professions themselves.

Wednesday’s demonstrations by thousands of notaires, trainees and sympathizers follow similar protests by bailiffs, court clerks and taxi drivers and shows how opposition is building to a deregulation drive which Hollande’s cash-strapped Socialist government hopes will show Europe it can reform.

“We have the potential to be quite disruptive - so they shouldn’t mess with us too much,” Regis de Lafforest, head of the national notaire union, told Reuters, hinting at strikes that could damage the euro zone’s second largest economy by freezing everything from property to inheritance transactions.

“That’s something the government appears to have forgotten.”

On Paris’ Place de la Republique, thousands of notaires and supporters wore T-shirts bearing the slogans “I love my notary” and “Life without notaries will be at your expense”.

The European Commission, which is in charge of promoting the free market for goods and services in the 28-member economic bloc, has pressed member states to reduce regulation in certain closed professional sectors to promote competition.

France - which the Commission’s website shows has in fact fewer regulated jobs than Austria or Germany - has long brushed off those calls. It kept rules such as one requiring separate licenses for at-home hairdressers and those who work in salons.

But an about-face came in July, when former Economy Minister Arnaud Montebourg took aim in a speech at the 37 professions, singling out notaires for what he said was their guaranteed income. His replacement, former banker Emmanuel Macron, is pursuing the initiative.

“Some of these professions haven’t changed for decades,” Macron told Europe 1 radio on Wednesday. “The notaires’ fee structure hasn’t changed since 1978 - when I was one year old. Surely that system needs to change.”

Under current rules, notaries even decide themselves how many can practice at once: this year it is just 9,541. A state finance inspector’s report estimated they have profit margins twice as high on average as those in the corporate sector.

In a speech to parliament on Tuesday, Prime Minister Valls said the deregulation drive was not intended to undermine the professions but to bolster the economy.

“France has taken the right approach on this, which is that it will help consumers,” Anne Houtman, former top representative of the European Commission in France, said in August.

The bill was originally due to be sent to parliament in October but has since been delayed until early next year to refine its content. Already, the professions are fuming.

“They are targeting ‘horrible’ independent professions to explain why the economy is not growing,” said Michel Chassang, who runs a union of independent professions ranging from lawyers to dentists. “But they are only masking their own incompetence.”

MEDICINE AT THE SUPERMARKET?

Officials in Hollande’s government, which is struggling with unemployment above 10 percent and has conceded that it will not achieve an EU deficit-cutting target until 2017, say doing away with some rules could unleash new sources of growth.

While Macron has downplayed Montebourg’s assertion that the reform could return a huge 6 billion euros of purchasing power to consumers, the government has high hopes that it will be judged positively by the European Commission and EU partners.

“We’re banking a lot on this,” said a government official. “This is something that will be put to France’s credit and that we can use to show we are carrying out reforms.”

A senior European source involved in the matter said Brussels welcomed proof of France’s commitment to reform, given its failure to hit deficit-cutting targets and a track record of disappointing structural measures.

“It’s true that if this (reform) is done and it is deemed sufficient, clearly that can be taken into account positively in our overall assessment of France,” said the European source.

But, he added: “Everything depends on how important these reforms are. Will they be sufficient? We’re waiting to see.”

The law could, for example, allow supermarkets to sell some pharmaceutical products such as pain-relievers over the counter, whereas currently they are only available in pharmacies.

At driving license centers, non-certified personnel could administer exams, bringing down waiting times and costs that are among Europe’s highest.

In 2013, some 530,000 driving license candidates who failed their first driving test - 40 percent of the total - had to wait 98 days on average to try again, forcing them to spend more for training hours on top of an average of 1,500 euros already paid.

A law could also ease access to jobs like notaire, bailiff or court clerk, which all require lengthy studies and, in some cases, hefty buy-in fees to start a firm.

“If nothing can be done to boost growth in the very short term, at least we can try to compensate on structural growth,” said Deutsche Bank economist Gilles Moec. “Reforming regulated jobs is key and it’s about the only thing they can do.”

But professional representatives have emerged furious from their consultations with government officials.

If they fight deregulation like licensed taxi drivers fought online for-hire car services like Uber.com - with wildcat strikes until the government agreed to restrict the latter’s ability to pick up customers - Hollande faces an uphill battle.

(1 US dollar = 0.7728 euro)

Editing by Mark John and Catherine Evans

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