• Emmanuel Macron’s rise came on the collapse of France’s political mainstream
  • Yet he and his team are steeped in the ruling elite’s traditional centralism
  • At times, Macron appears more eager for EU help than for domestic reform
  • To revive France, the president must tap the country’s talent by unleashing markets

France is always good for surprises in politics, although the national character that produces them never changes.

Emmanuel Macron, a young spinoff of the Socialist party, won the presidency. Last week, his newly formed party, La Republique en Marche (REM), won a solid majority in the parliamentary elections, with 350 out of 557 seats in the National Assembly.

Mr. Macron was helped by France’s two-round, proportional voting system, which allows a party with 30 percent of the first-round vote to win a majority. Voter turnout, at 48.7 percent in the first round and 42.6 percent in the second round, was the lowest since the inception of the Fifth Republic. This shows a lack of enthusiasm for politics and the established parties, but also for President Macron himself.

Smear campaign

Traditional parties, especially the Socialists, were atomized in the elections. The Republicans did manage a respectable 27 percent of the parliamentary vote and 137 seats. The National Front had its loyal voters, but polled just 8.9 percent in the second round – still enough to increase its representation to eight deputies.

How did all this happen?

As late as December, the candidate of the Republicans (essentially, Christian Democrats), Francois Fillon, was the front-runner, trailed by Marine Le Pen, the perennial runner-up. It was Ms. Le Pen who aroused the most concern.

The real threat to the status quo was posed by Mr. Fillon’s liberal program, which proposed limiting the state’s role in the economy

But the real, if unspoken, threat to the cosy status quo was posed by Mr. Fillon’s excellent liberal program, which proposed limiting the state’s role in the economy and shaking up France’s sclerotic labor laws. Perhaps not surprisingly, the Republican candidate became the target of a smear campaign, which was unfortunately also tolerated by some leaders of his own party.

The damage inflicted on the Socialists was even worse. President Francois Hollande’s miserable performance during his five years in office marginalized the party completely.

Into the vacuum left by these mainstream parties stepped Mr. Macron and his new movement, which has been described as “social liberal.”

Etatist thinking

What does this label mean in practice? The 39-year-old president is certainly brilliant and charismatic. His REM movement has attracted politicians of almost every political stripe behind its reform program, and it insisted on a 1:1 gender balance for its parliamentary lists. Large numbers of these new deputies were recruited from outside politics, which could turn out to be an important positive.

Nevertheless, Mr. Macron and the more experienced members of his team are still very much steeped in traditional French etatist and centralist thinking. While the new president pledged to make the labor regulations more flexible and cut back the oversized government bureaucracy, these moves will be quite cautious. Even so, he will have to face protests from the left.

The burden of public administration has grown so heavy in France that it might be too late for small steps

As for the rest of his reform program, a fund of 10 billion euros is to be put in place to finance start-ups, while foreign entrepreneurs will be offered visas as an incentive to move to France.

This is certainly well-intentioned. Yet experience shows that overregulation and rigid labor markets frustrate start-ups, which flourish without state support in more liberal environments. Mr. Macron’s proposals do not go far enough or fail to address the root of the problem. The burden of public administration has grown so heavy in France that it might be too late for small steps.

With that in mind, a complete turnaround in France’s financial and economic situation seems unlikely. But with a solid legislative majority, there is still plenty the government could do.

French students protest proposed changes in the country’s labor laws in 2016
Expect the left to come out in force if President Macron takes even a feeble stab at making labor laws more flexible or cutting back the oversized state bureaucracy (source: dpa)

Outside help

Yet President Macron seems intent on looking elsewhere for help. The platform for remedying France’s problems – and those of other non-reforming states – is to be the European Union.

One of the ideas gaining traction in Paris is to centralize sovereign debt at the Union level, which would make all eurozone states debtors under a twisted notion of economic solidarity. To better monitor and “harmonize” these economies, EU ministries of economy and finance would be created.

This clear step toward a planned economy would probably be popular in southern Europe, but it would prove devastating for the highly productive northern economies. It would institutionalize a system of automatic and permanent transfers, while limiting the healthy pressure of competition.

This is the road to mediocrity, stagnation and curbs on economic freedom. As convinced Europeans, we can only hope that Germany resists these proposals and persuades other states of their danger.

Carried to its logical conclusion, the proposed scheme would deepen centrifugal tendencies in Europe and ultimately split the EU into two blocs.

Bigger danger

The sad irony of this story is that the only real reformer, Mr. Fillon, was rejected. Fears were mostly focused on Marine Le Pen, who was considered a lethal threat to Europe’s cohesion because she wanted an exit referendum.

Mr. Macron’s precepts of centralization and harmonization strike hard at a Union based on variety

While we can safely assume that Ms. Le Pen would have badly hurt cooperation with Brussels, Frexit was always a mirage. First, because the National Front would not have received the necessary parliamentary majority, and second, because France is one of the EU’s greatest beneficiaries and would never have voted to leave.

In this sense, the bigger danger to the European idea might be posed by Mr. Macron’s program. Its precepts of centralization and harmonization strike hard at the principle of a Union based on variety. This could ultimately lead to a breakup.

For generations, the French political and administrative elite has been educated at the Ecole Nationale d'Administration (ENA) in the same centralist dogma. Their European concept is of a unitary, centralized entity, following the French example and therefore strongly influenced by Paris.

No de Gaulle

This is not the Europe that President Charles de Gaulle – who really did “make France great again” – worked and strived for. What he intended to help create was a union of sovereign countries, a fatherland of fatherlands.

When de Gaulle took power, France was virtually ungovernable. It had already lost the Indochina war and was nearly bankrupt, yet determined to keep a colonial empire it could no longer afford.

De Gaulle’s achievement was to overcome strong resistance to decolonization, while still preserving French influence in Africa. The economy was brought back on track and France quickly became a European powerhouse.

De Gaulle was defeated when tried to put France on the path to federalism and abandon centralist dogma

It was only when de Gaulle tried to put France on the path to federalism and abandon centralist dogma that he was defeated by reactionary forces from the center, right and left. De Gaulle was a dedicated soldier and patriot, not a graduate of ENA. He was a true conservative, a person of principles and responsibility, seeking to preserve the good while championing reforms and innovation.

Some observers are now drawing parallels between Mr. Macron and de Gaulle, noting that both men founded new political movements. The comparison does not seem apt. Thus far, Mr. Macron appears more opportunistic than principled.

Making choices

The new president claims to be neither left nor right, and his program has socialist and liberal bits mixed together. Now that he and his movement are in power, however, they will have to make choices and take sides.

Social-liberal would be considered poor positioning in business. The value proposition is unclear. Still, this technique worked well in the election campaign – perhaps because after Francois Fillon was defamed, no other party had any value proposition to offer. The National Front was the exception, but it lacked crossover appeal beyond its loyalist base.

As was the case with President Obama, Emmanuel Macron is being welcomed with high expectations for change. This normally leads to disappointment.

A close look at President Macron's program suggests that he is a “rebranded” version of the old elite

Mr. Macron is himself an ENA graduate. A close look at his program suggests that he is a “rebranded” version of the old elite produced by such grandes ecoles. The packaging is different, but the essential dogma of a planned, centralized state is much the same.

Miracles happen, and we must hope that President Macron may yet succeed in reviving France’s economic competitiveness by deregulation and administrative reforms. The talent is available in the country, if only markets are unleashed.

There is no other way to remedy chronic unemployment among young people. Most of all, it avoids transferring sovereign debt to the European level, where it could threaten the EU's future.

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