Thursday’s figure of nearly 3.3 million set a grim record. “A large part of the economy just collapsed,” said Ben H… https://t.co/aNB36p7Y2A
Paris airports referendum
On 10 April, a large cross-party group of French parliamentarians gathered enough support to initiate a national referendum proposal against the privatization of Groupe ADP, the operator of Paris's three major international airports, Charles de Gaulle, Orly, and Le Bourget. The lower house of parliament, which is controlled by President Emmanuel Macron's Republic on the Move (Le République En Marche: LREM), had earlier approved the privatization as part of the so-called Pacte Law. The state currently owns 50.6% of ADP, worth an estimated EUR9 billion (USD10 billion).
This is the first time that opposition deputies have united to force a referendum on proposed legislation. Such a provision - which requires the support of one-fifth of the members of both houses of parliament (185 of 925) - has never been used since it was added to the constitution in 2008 to increase participatory democracy.
The sale of ADP is integral to government plans to reduce the public debt, which stood at 98.7% of GDP in 2018, and finance a EUR10-billion technology innovation fund, a key campaign promise. Although there is an elevated risk that a national referendum will eventually block the sale of the state's stake in ADP, opposition is specific to the privatization of airports, which are deemed prize state assets. This is therefore not indicative of a more widespread opposition to privatizations, and other earmarked companies such as energy utility Engie and state gaming monopoly Française des Jeux are unlikely to face the same hurdles.
For the referendum to proceed, the proposal has to be validated by the Constitutional Council and 10% of the electorate - about 4.5 million people - must sign the online petition. Should the grassroots "Yellow Vest" protest movement, with its extensive reach, start sharing the petition via its main social media channels, this would significantly increase the likelihood of the referendum reaching the required number of supporters and the ADP privatization ultimately being blocked. If the referendum is successful, and the government fails to present specific policy proposals derived from the "grand national debate", there is a heightened risk of further referenda driven by Yellow Vest protesters and opposition MPs on upcoming legislation, such as pension reforms.
- Capital Markets Weekly: Risk of multiple emerging-market defaults increasing
- Weekly Pricing Pulse: Commodities sell off as the shut-downs continue
- Capital Markets Weekly: Market volatility to remain severe amidst flight to cash
- COVID-19 Impact Update: US GDP to plunge to -13% in Q2, unemployment approaching 9.0% by December
- Weekly Pricing Pulse: Commodities drop sharply as the global economy shuts down
- The global economy: Headed for recession
- COVID-19 to precipitate US recession in 2nd quarter
- Fed does not dither: Aggressive monetary policy response to COVID19