Tuesday, May 9, 2017

Inertia, Revolt Will Test Macron’s Reformism

Vested interests will fight to derail the new president’s optimistic drive to shake up France.


By Paul Taylor
Politico EU
May 9, 2017

In France, efforts at reform often end in tears, if not in blood.

The country’s newly elected president, Emmanuel Macron, will need steely determination and all his youthful intellectual powers of persuasion, as well as supportive European partners and a dose of economic good luck, if he is to avoid the fate of past liberal modernizers.

History was not kind to his predecessors. During the French Revolution, the moderate, decentralizing Girondins were purged and guillotined by the centralizing, authoritarian Jacobins. In the 19th century, Louis Philippe, the bourgeois, reformist “king of the French,” was toppled at the barricades in 1848.

More recently, reformer Pierre Mendes-France was swiftly evicted by the Fourth Republic’s party system in 1955 after extricating the country from Indochina and starting the decolonization of Tunisia and Morocco. And pro-European centrist President Valéry Giscard d’Estaing was denied a second term in 1981 after trying to build an “advanced liberal society.”

France is rarely liberal for long. Three different faces of Europe’s pivotal nation have been on display in this still incomplete election year: the complacent, the rebellious and the optimistic. Macron, 39, embodies the latter. But he will need to overcome a deep aversion to change and a proclivity for sometimes violent revolt if he is to galvanize the economy, reshape the political system and deepen European integration.

The dominant trend of the last two decades has been sullen complacency — what the French call l’immobilisme (immobility). This has led to genteel decline, too slow to stimulate reform or spark revolt. Shielded by an implicit German guarantee, France has sustained its generous welfare state and giant public sector with budget deficits financed by cheap borrowing, shielded by an implicit German guarantee.

Many people have suffered unemployment, stagnant or falling living standards, a loss of personal status and a sense that their country and its language and culture are losing ground internationally. But the slide has been so gradual that the national reflex has been to cling to the status quo, defend acquired rights and privileges, and reject disruptive change.

This dynamic may explain the disconnect in opinion polls. The French report feeling less confident in their country’s future than Afghans or Iraqis, and only just a little more than Greeks, but when asked how they feel about their personal situation, they are much less gloomy.

Many of the widely shared perceptions that shaped the electoral debate are statistically unfounded. Social inequality has not widened sharply since some distant golden age. Public services are not collapsing; indeed, compared to most countries in the world, they are enviable, as is the state of French infrastructure. Insiders with secure jobs, healthy pensions, a 35-hour work week with six or more weeks’ holiday and good public health care have been mostly successful in defending their status against outsiders — the unemployed, the young and immigrants.

France’s deep attachment to the status quo may ultimately prevail again, especially if Macron’s new centrist En Marche movement fails to win an outright parliamentary majority and has to haggle for support issue-by-issue with other lawmakers. That dynamic was on display on Sunday. No sooner had Macron been declared the victor than politicians from the mainstream conservative Republicans were vowing to win control of the National Assembly in elections on June 11 and 18 and turn him into a lame duck, forced to cohabitate with political opponents in government.

A second feature of France never far from the surface is rebellion. As the leftist philosopher Jean-Paul Sartre famously said, “It’s always right to revolt.”

Each time a government has tried since 1995 to push back the retirement age, abolish special public sector pension regimes, ease hiring and firing, or pay young labor market entrants below the minimum wage, protesters have taken to the streets. “The French have more talent for making revolution than for reforms,” the 19th-century political theorist Alexis de Tocqueville observed.

The country’s deep streak of bolshiness was given full throttle once again in this election campaign. Candidates demanding a radical break with globalization and with the EU’s open market economy won more than 40 percent of the vote in the first round. Both runner-up far-right leader Marine Le Pen and leftist Jean-Luc Mélenchon, as well as two Trotskyists, advocated upending the political system, changing the EU beyond recognition or walking out, imposing trade barriers and making the central bank print money to finance investment and yet more state spending.

With her relentless focus on “the people’s anger” against “the elites,” her rejection of liberal reforms and an open, multicultural society, Le Pen was the megaphone for the angry, pessimistic France that has made immigration a scapegoat for their frustrations and sense of decline.

With his emphasis on optimism and generational renewal, and his unambiguous embrace of Europe and of social diversity, Macron embodies the France of aspiration.


But in the end, Le Pen lost heavily. And instead, the third — optimistic — France championed by Macron prevailed, at least for now. His vision is of a nation full of pent-up energy, creativity and entrepreneurship, straining to be unshackled from restrictive practices, over-regulation and over-taxation; a younger generation desperate to escape the doom loop of unfocused education, precarious temporary jobs and unemployment.

Many of these young talents have been emigrating to Britain, America or Canada but would rather be starting businesses or building a career in France.

Two leading market economists — Holger Schmieding of Berenberg Bank and Erik Nielsen of Unicredit — reckon that with a solid package of reforms and fiscal discipline, France has the potential to overtake an aging Germany’s growth rate and become a more equal partner in leading a deepening of the eurozone and the EU. “After Germany’s golden decade, now it could be France’s turn in the 2020s,” Schmieding wrote in a note to clients.

There are also challenges and opportunities in the banlieues, those grim high-rise suburbs where unemployment is more than twice the national average and young people, often of immigrant origin, are desperate for better ways to make a living than in the drugs trade and petty crime.

With his emphasis on optimism and generational renewal, and his unambiguous embrace of Europe and of social diversity, Macron embodies the France of aspiration, what Tony Blair and political theorist Anthony Giddens called “the third way.” The young president’s social liberalism offers the prospect of an acceleration of the current cyclical economic recovery and a path toward a more inclusive society.

But the first two Frances will be lying in ambush. Macron’s opponents will first try to put the handcuffs on him in next month’s legislative elections. And already trade unions and the hard left are threatening a “third round in the street” to resist his planned labor market reforms. The real struggle between the three Frances has only just begun.


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