France, Europe and the apocalypse

France’s Emmanuel Macron on the campaign trail
Social Democrat Emmanuel Macron proposes policies that would saddle the rest of the Europe with France’s current economic malaise (source: dpa)

These days, the possible victory of the National Front and its leader Marine Le Pen in the forthcoming French elections is considered the fiercest Horseman of the Apocalypse, hell-bent on destroying the European Union and the continent’s cohesion.

Ms. Le Pen’s triumph would certainly be bad for France and Europe. Although her promised referendum on whether France should remain in the eurozone and even the EU is likely to fall short of endorsing such momentous change, her socialist economic program will continue the ongoing destruction of the French economy, its competitiveness and public finances. This is dynamite to Europe’s cohesion.

Such a scenario would, however, only accelerate a disaster that was already looming. The present government’s socialist policies, which have shied away from reform and preserved France’s oversized public sector, will eventually bear the same results.

Mr. Macron’s pronouncements indicate an adherence to the Keynesian economic policy approach at the EU level

Alternatives to Ms. Le Pen are the politically conservative and economically liberal Francois Fillon and social democrat Emmanuel Macron.

Mr. Fillon’s economic program could, over time, balance the French budget and stimulate the economy by reducing overregulation and introducing a more efficient tax system. It could also help to shrink the oversized state sector. However, this candidate’s chances to win have been diminished by allegations that he had employed his family in public posts. Such practices are not illegal in France, but claims have been made – it is hard to ascertain how well-grounded – that Mr. Fillon’s wife did not actually perform work while in public employ. According to polls, this has undermined the candidate’s position in the race. Similar charges brought against Ms. Le Pen do not appear to hurt her nearly as much.

Socialist mirages

This leaves us with Mr. Macron. He claims that he will bring France’s budget deficit below the European benchmark of 3 percent. The promise is based on current government projections, which have already been contested by the country’s official auditing body. The candidate’s plan also does not appear plausible in light of his intention to further increase government spending.

Mr. Macron’s pronouncements indicate an adherence to the Keynesian economic policy approach at the EU level. According to him, Europe should end austerity and introduce a growth model in which additional spending – on top of the already lavish outlays planned by European Commission chief Jean-Claude Juncker – ought to be implemented. The Macron policies boil down to more state and more EU centralization. At the heart of the scheme is the creation of a European Ministry of Finance and Economy, an all-powerful body to plan and monitor the EU economy.

Hence the candidate’s demand that Germany spend more. As a consequence of Mr. Macron’s plan, Germany would in the end need to supply the bulk of the additional spending on the European level, which would ultimately result in a further expansion of the system of “transfer payments.” This way, France’s current economic and fiscal misery would become a fixed part of the EU system.

Europe faces a sad dilemma. Marine Le Pen in power is likely to bring dynamite-like disruption to France and Europe. Emmanuel Macron intends to continue treating the French cancer with aspirin and transmit the disease to Germany and the rest of the EU, while demanding that they pay for France’s subsistence in the meantime.

The difference between the calamities that these two candidates can bring on Europe lies mainly in the speed of the events to come. The third contender, Francois Fillon, appears to be damaged goods, as possible criminal proceedings loom. Sadly, he is the only one to have put forth a sustainable economic agenda.

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