25 June 2022

Saturday, 12:17


Emmanuel Macron elected to his second decisive term



For those who have watched the TV series The Man In the High Castle made as a dystopian narrative of alternate history, it is easy to imagine the panic that reigned in Europe on the eve of the second round of the French presidential election. Film-makers imagined what the world would be like if Nazi Germany and its allies had won the Second World War.

On April 21, three days before the election, Politico also presented its own version of alternative story—what would happen to Europe if Marine Le Pen, leader of the far-right nationalist party Rassemblement National, became the next French president.


Fascist threat

It was not a funny storyline though. This was the mood of the EU and most European leaders as they watched French voters in the first round ready to vote for anyone from far left to far right but not for the ruling party, La République En Marche (LREM).

While, according to polls, most French people see Emmanuel Macron as better equipped to run the country in terms of economic growth, fighting the coronavirus, environment, healthcare and the ongoing war in Ukraine, Le Pen is preferred on issues related to social inequality, terrorism, the purchasing power of citizens, pensions, immigration and crime.

"Letting Marine Le Pen in as president means opening the way to a fascist party" (Le Courrier, Switzerland), "the very survival of the EU is at stake" (Frankfurter Allgemeine Zeitung, Germany), "Europe faces a deep crisis" (Publico, Portugal), "European integration is threatened" (Falter, Austria) - the European media seemed to compete in forecasting a bleak future for Europe.

Acknowledging the fascist threat posed by Marine Le Pen requires political and historical knowledge, which many, not only French, do not have, journalists said. However inexperienced in political issues, ordinary people are rightly outraged by falling living standards and believe that the election of Le Pen would be a good thing anyway, because she will never have a majority in parliament, which means she will not be allowed to encroach on democratic freedoms. They do not want to understand that President Le Pen will have the right to change the rules of elections and dissolve parliament altogether.

Anyone can read in her programme about her plans to destroy the French democracy, but an average French citizen will find it easier to believe her slogans and generous promises to boost the purchasing power of the ordinary French.

For international business, the events in France triggered unpleasant associations with 2016, when markets were wrong in two important elections. First, in June no one believed that the British majority in the referendum would decide on Brexit. In November, Donald Trump surprised by becoming the US president, even though he was well behind Hillary Clinton in all polls. Improper calculation of risks associated with that election caused a shock wave in stock markets.

Le Pen's election programme ignores many EU rules, such as the Convention on Human Rights, freedom of movement and the free employment market. In addition, economists feared that Le Pen's tax plans would further boost inflation in France, which could make it an unattractive country for investment.

This shows that the consequences of Le Pen’s victory would not be limited to France, which is a significant Euro country as well. If her economic policies depreciated the single European currency, companies and citizens in other European countries would also feel the effects.

And in this flood of apocalyptic images, no one paid attention to the fact that by calling on the people of France to vote for Macron, German Chancellor Olaf Scholz and his colleagues from Portugal and Spain, Antonio Costa and Pedro Sanchez, had actually allowed themselves to intervene in the internal affairs of another country.


European anthem

Frankfurter Allgemeine Zeitung appreciates Macron’s consistent stressing of the importance of the EU during his election campaign. “In his confrontation with a frighteningly sprawling group of zealous far-right activists, Macron did not seek salvation in the tactical Euroscepticism that many European politicians resort to when faced with such a situation. Macron had courage to speak up for the EU, pointing out that the community is the key to solving the problems of globalisation - both materially and in terms of identity politics," the newspaper said.

However, perhaps it was a reluctance to part with united Europe that ultimately had a decisive influence on the French choice in the second round of elections.

That’s why Emmanuel Macron dedicated his second victory to Europe. On the election night, he took on stage in front of the Eiffel Tower to sing the European anthem, Beethoven's Ode to Joy. It was a musical response to Marine Le Pen, who had promised to remove the EU flag from her official portrait. It was also a signal to EU partners that they can count on France for the next five years.


Parliamentary passions

Now it will be decisive for the fate of France whether Macron gets a majority in the forthcoming parliamentary elections in June. If he fails, he will have to appoint someone from the majority camp to head the government. His power will then be considerably weakened and political decision-making will become much more difficult.

Macron was supported in the second round by the left-wing parties and conservatives, but he will lose those votes in the parliamentary elections.

Macron's LREM founded in 2017 does not have a sufficiently established network across the country and is not represented at all in many regions and localities.

Jean-Luc Melanchon, who finished third in the presidential election, hopes to become prime minister if the left wins the election in June. Right-wingers (Marine Le Pen, Eric Zemmour and others) may also try to gain power through parliament.

LREM's ability to implement its economic programme will largely depend on the composition of the 577-seat National Assembly.

According to IHS Markit, an agency specialising in assessing risks, opportunities and prospects, there are three main scenarios.


Scenario 1

Stable majority for LREM in the National Assembly would allow Macron to implement much of his economic platform and other policy priorities, such as labour market reforms, including the adjustment of unemployment benefits, without major obstruction from the parliament.

Macron will maintain a clear pro-European stance and focus on further enhancing France's influence on decision-making in the bloc. In particular, by strengthening defence cooperation and taking the lead as the bloc's main military power.

However, it is also likely that some of Macron's most controversial planned reforms, such as raising the retirement age, will be cut because of the risk of union strikes and protests. In 2019, Macron's attempts at pension reform led to a nationwide strike.

It is widely expected that the Macron government will be prepared to use fiscal policy to support the economy, even if this means failing to meet the budget deficit reduction targets agreed with the EU.


Scenario 2

LREM fails to get enough seats to secure the parliamentary majority. But the support given to Macron in the second round by the founder of the Republican Party (Les Républicains), Nicolas Sarkozy, and the LR presidential candidate Valérie Pécresse, increases the likelihood of an LREM-LR coalition.

This coalition is likely to maintain a strong pro-European stance, optimise the labour market, implement pension reform and invest in the expansion of nuclear energy production. However, the LR deputies are unlikely to support the construction of new wind farms, as Macron insists.


Scenario 3

A multi-party coalition, which agrees on lowering some taxes, such as production taxes. But reaching consensus on the pension reform or changes in labour market regulation is likely to remain difficult.

In this case it is possible that the key elements of Macron's election programme, notably pension reform, will be adopted by presidential decree, hence bypassing the parliament.

There is also a fourth scenario, in which the parties that lost the presidential elections form a coalition without LREM. However, according to analysts, this is the least possible scenario.

There is a great risk that Macron, even with the third option, would have to govern under pressure from a largely stubborn extreme left and right. This increases the risk that his new term could be very turbulent—with no rudder or tailwind, as is the case when different branches of government represent different political directions.


The challenge

Macron understands that he remains in office not because he has won the hearts of the French, but because for many he is the lesser evil. His main task, as Macron also admits, will be to turn a fractured country into a united state. France is divided into various sections: rich and poor, urban and rural, indigenous and immigrant. And these cracks are growing wider every passing day.

Yet it is Macron who during his first five years has weakened moderate parties to the point where they can no longer compete with the extreme right and left-wing populists. If he does not want to allow another populist to replace him in the next election after five years, in which he can no longer run anyway, Macron must change his style of government, the French believe.

With regard to foreign policy, after Angela Merkel's departure it will inevitably be Emmanuel Macron who will be seen as the de facto leader of the European Union. This places responsibility on him as a leader on a global scale.