Wednesday, July 5, 2017

The Predictable Winners Of Macron's Presidency

Emmanuel Macron's instinct is to pursue policies that benefit France's elite "enarques."

By Pascal-Emmanuel Gobry
The Bloomberg View
July 5, 2017

French President Emmanuel Macron has promised a dramatic departure from the recent past. France's youngest leader since Napoleon has brought in on his coat-tails a new generation of fresh-faced young leaders, many of whom have never held political office before. And in his debut speech to both houses of France's parliament, Macron reiterated his call for a new order -- a "veritable revolution," as he called it, to re-energize French politics.

But while the new faces and reforming ambitions are a welcome change in France, it's worth asking whether the move will empower new thinking. A closer look suggests that the most immediate beneficiaries of Macron's policies will be a more seasoned group: France's "enarques," or graduates of the famous Ecole Nationale d'Administration, its finishing school for civil servants.

Every country has its factories for elites -- think of Oxbridge in the U.K. or the Ivy League in the U.S. France's ENA is relatively small, graduating 80 to 100 every year; but ENA graduates are immediately hired into top civil service tracks. Because of the close links between the government and business, and the system whereby civil servants can work for the private sector with a guarantee of their old government job back, ENA grads also dominate the business world. (This explains how Macron could end up a managing partner at Rothschild & Co at the ripe young age of 30, after working in the French finance ministry out of ENA.)

This core of seasoned, well-connected professionals are set to see their power increased under Macron -- not out of some conspiracy to empower elites, but because to an enarque most problems are solvable with the help of other enarques. There are already signs this is happening.

Much has been made of how Macron has introduced political neophytes to France’s National Assembly. But French deputies have skeletal staffs and depend on government services. While long-serving members who have built up relationships and expertise in a domain over the years and therefore do not rely on official bodies as much are the exception, most of these members are now gone, thereby increasing the power of the (enarque-run) bureaucracy over the legislature. The very inexperience of Macron's new deputies makes them more dependent on the old guard, or at least the ENA graduates who run most of the bureaucracy.

Similarly, Macron’s decision to prevent politicians from holding several offices at once, a seemingly common-sense measure, works to the benefit of the enarques. France has so many administrative layers that any local project must gain the approval of several bodies. Often the only way for a local politician to wrest approval or subsidies from a reluctant bureaucracy is to be elected to several of those offices at once. While no doubt well-intentioned, the move will in practice end up reducing the power of local elected officials relative to the largely enarque-dominated central bureaucracy.

Macron’s proposed anti-terrorism law has a similar impact. The main thrust of the law is that it takes many decisions in anti-terrorism investigations away from investigating judges, and puts them into the hands of prefects, senior civil servants in charge of overseeing police forces in a specific area. In France, judges don’t come from ENA, but from a different civil service school. Prefects, however, do. However unconsciously, Macron and his advisers and prime minister find it natural that the counter-terrorism problem would be better tackled with, well, enarques, leading the way.

Macron's regulatory decisions may also benefit -- guess who. Bloomberg News reported that Macron’s government has done a quiet U-turn on EU rules regarding banking regulation, softening France's traditionally hawkish line. As Macron knows well, three of the four biggest French banks by assets are run by enarques, and finance is a common landing pad for enarques; they will be delighted.

The problem with all of this is not necessarily that enarques are not well-suited to running France; by and large, they are very smart, competent and public-spirited. But as with any tight-knit group of people who have the same education, similar careers and often similar backgrounds, biases and groupthink can take over. Furthering the power of unelected bureaucrats over elected public servants may backfire among the many who feel disenfranchised already by the political elite and recently rejected both mainstream parties as a result.

France has been ruled by enarques for most of the postwar era, and the results are decidedly mixed. The Macron era ought to be a break from the past. Whether the enarque class can use their new and old powers to further Macron's goal of reinvigorating French politics remains to be seen. But one thing seems clear: The man whose rise no one predicted seems to be predictable after all.

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