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French President Emmanuel Macron faces his biggest test, both domestically and at the European level, in achieving deep reform of France’s national railway operator, the SNCF. Macron’s ambition to liberalise the French railway system forms part of his wider package of labour market reforms. It is also intended to prepare the industry for the EU’s push to open up the transport sector to greater competition by 2023. However, the government’s plans to overhaul the structure of the SNCF have been met by a wave of opposition from trade unions, including a month of planned strikes.

At its heart, the president’s reform of the SNCF aims to end the special status currently enjoyed by railway workers. In particular, Macron is targeting privileges such as the guarantee of life-long employment and the SNCF’s special early retirement plan that allows rail workers to retire as early as 52. He argued such reforms are necessary to reduce the SNCF’s debt burden – currently at €46.6 billion – and to tackle France’s high unemployment rate of 10%.

Macron’s approach to introducing this reform is in contrast to the more conciliatory stance he took last year. After his election last year, Macron pushed through legislation to loosen restrictions around firing workers and decentralise collective bargaining. These reforms were met with little organised opposition, in part because the president pursued a method of continuous dialogue with trade unions to accommodate their concerns. This year, Macron is engaging in a stand-off with the militant CGT-cheminots railway union, in what has been described by one French newspaper as a “war of attrition.” Importantly, outside actors including students and other public sector workers are also mobilising. There is recognition that this is a totemic issue – if Macron breaks the resolve of the SNCF, this will pave the way for broader labour reforms.

Indeed, the outcome of this confrontation will have wide-reaching political implications for the “Jupiterian” president. If Macron manages to pass these reforms, this will put him in good stead to achieve further structural reforms, including the reduction of the public sector and the overhaul of the pension system and unemployment benefits. However, his failure would undermine his ability to achieve his domestic agenda. This will in turn impact on the weight of his authority within the EU, where he has established a much stronger voice for France than his predecessor François Hollande.

Macron pegged his ambitions to push for change at the European level – including the introduction of a new Eurozone budget and finance minister – to his ability to achieve domestic structural reforms. During the 2017 presidential campaign, Macon said:

We will not whip Europe back into shape if France doesn’t do its job. It’s now our duty to finally follow through with reforms. France must restore its credibility by reforming the labour market and getting serious about its budget.

If he succeeds in passing these domestic reforms, EU member states that have traditionally been opposed to deeper Eurozone integration – Germany, the Netherlands, Denmark, Sweden etc. – will have to start seriously considering his proposals.

The result of this stand-off will also define his domestic image – other leaders before him have tried and failed to restructure the national railway operator. Most notably, in 1995, Prime Minister Alain Juppé’s attempts to reform the retirement age of railway workers crumbled after three weeks of strikes. For now, public opinion is on Macron’s side – according to a recent Ifop poll, 51% of the French public believe the government should carry out its reforms of the SNCF. But this slim majority could shift in the coming weeks. To realise his ambition of becoming France’s reforming president, Macron will have to show resilience in the face of this test.

This article was first published on Open Europe's blog.