France’s last-chance Salon

​The election of independent centrist Emmanuel Macron as President of France will have come as a relief to companies across Europe. But ominous clouds remain on investor horizons.
Paul Lewis
May 08, 2017

Gideon Rachman, the FT’s chief foreign affairs commentator, reports that the new president  faces a monumental challenge: re-invigorating both the French economy and the European project. At home, he must deal with unaffordable public sector spending (at 56% of GDP) and an over-regulated private sector, including the 35-hour working week. Strikes and street protests are sure to follow any serious reform attempts. Moreover, his new, ‘En Marche!’ party is unlikely to get the parliamentary majority he will need to push through serious change and face down demonstrators, forcing him to assemble a broad coalition, possibly headed by a centre-right prime minister.

Success in domestic economic reform would help President Macron persuade Germany’s Chancellor Angela Merkel to loosen austerity and relieve some of Europe’s populist tensions. But failure could have severe consequences for business and wider European economies. Macron’s election could represent the European establishment’s last stand against resurgent nationalism, populism and protectionism.

Rachman is right to see profound risks to free-market democracy. As the FT’s election analysisreveals (in some very useful charts), Le Pen’s second round boost came mainly from conservative Fillon supporters (effectively allowing Le Pen to break through into the political mainstream), and from ‘far left’ supporters of socialist Mélenchon. Thus a staggering 43% of French voters have supported the political extremes, and more than one third rallied to the far right.

The French vote is no anomaly. A breakdown of voters by education (a proxy for a range of beliefs and circumstances) reveals that Macron attracted 84% of most educated voters, with similar support among those with higher income and social class. This mirrors the breakdown of voting patterns in the recent UK Brexit vote, the Netherlands’ referendum and the US presidential election, suggesting that the same anti-establishment, anti-globalisation sentiment is spreading across western economies.

More fascinating insights into how globalisation is dividing France can be found in this this reviewof geographer Christophe Guilluy’s new book The Twilight of the French Elite (untranslated).

Paul Lewis

Editorial Director at Headspring