Click here to listen to previous episodes.
About Chen Lin
Author "What is Chen Buying? What is Chen Selling?" Chen grew $5,400 to $2.3 million in 10 years. Learn More
Why Emmanuel Macron's Surge Is Unlikely to Change Anything
At third place in the polls, tête à tête with conservative candidate François Fillon, a staunch europhile, and a dear of many enthusiastic young voters, Emmanuel Macron is the supposed incoming star in French politics. Even libertarians in the République are getting excited. But Macron’s free-market ideas might fail very quickly given the French political reality.
When Emmanuel Macron announced that he’d run for president, there were already reasons to be optimistic: a fearless and ambitious political youngster, unapologetically describing himself as a ‘liberal’ (a word usually equating to political suicide in France).1 His famous Macron Law liberalized the inter-city bus market, created competition in the notary business and allowed businesses to open more often on Sundays. Adding to this, we were able to enjoy interviews in which Macron defended the sharing economy and services such as Uber, when he replied to a left-wing journalist describing Uber as a company exploiting young people:
Go to Stains [a crime-ridden outskirt of Paris] and explain to these young people who are Uber drivers voluntarily, that they should rather lean against a wall all day or deal drugs. Explain it to them! Go! We’re doing fine here in the 12th district of central Paris: nobody’s unemployed, I’m not and you’re not. […] What I know is that’s it’s our collective failure. Uber, like others which are French, employs people in those areas in which we have nothing to offer them. Nothing!
Meanwhile, searching through Macron’s economic proposals, The Financial Times points out the following measures Macron proposes:
- Target €60bn cut in public spending by 2022, from 55 per cent of GDP to 52 per cent.
- Cut up to 120,000 state jobs by not replacing retiring civil servants.
- Keep deficit below 3 per cent of GDP, in line with EU requirements.
- Negotiate a eurozone budget and EU-wide investment program with Germany.
- Lower corporate tax from 33 per cent to 25 per cent. Keep Socialist government’s tax breaks on salaries.
- Extend unemployment benefits to entrepreneurs, farmers, self-employed and those who quit jobs voluntarily.
- Exempt 80 per cent of households from local housing tax — a €10bn measure.
For every person concerned about the future of the country of baguettes and croissants, this seems both heart-warmingly optimistic and strikingly unlikely.
Where’s the Political Support?
Let’s just assess for a moment what Emmanuel Macron needs to overcome to shape these necessary reforms. For one thing, Macron needs a political majority with a government willing to go through the months of strikes and protests that he had to endure the last time he attempted a reform. In order to get that, he needs a majority in parliament.
The parliamentary election will be held in June of this year, and the Socialist Party is unlikely to rally behind Macron, because even though some notable names openly support his candidacy, like the mayor of the second-largest French city Lyon, many MPs either regard him as a traitor for using his post as Minister of Economy as a catapult to the presidency, or support Benoît Hamon and his far-left policies. The Republicans, which will likely gather a majority in the parliamentary elections, are even less inclined to rally behind Macron, for partisan reasons alone after Macron declared himself as “being left-wing” on national TV.
No Popular Support for Less Interventionism
What is most interesting is that even though popular support for Macron is rising, his policies are bound to be unpopular. If more flexibility for work on Sunday, as Macron’s Law had implemented, sparked weeks of protests in the streets, then major spending cuts would be bound to bring the country to its knees. The former Minister of the Economy is also known to be a great defender of free trade, yet the French public definitely doesn’t follow him on that assessment: In an IFOP poll in 2012, prior to the last presidential election, 53 per cent of French people believe that free trade has a negative impact on consumer prices; 69 per cent assert that it aggravates the deficit; and a staggering 81 per cent believe it has a negative impact on employment.
In a poll conducted on the level of public debt (which in France is at 100 per cent of GDP at this point), only half of those surveyed believed it to be a priority that needs to be dealt with, while between those aged 18 to 24 it was only a third of those surveyed. In order reduce the budget deficit, 62 per cent suggested raising sales tax for restaurants and 57 per cent support taxing overtime hours as well.
The Maastricht Treaty, designed to put a 3 per cent limit to deficit/GDP and a 60 per cent limit to debt/GDP, is opposed by 64 per cent of French people. 58 per cent of French people believe that government should intervene more in the economy.
The Actual Problem Lies Deeper
France desperately needs entitlement reform and laboor flexibility, but there’s no public support for any measures that would rectify that. Here’s the beef that one should have with optimistic libertarians in France: it’s not the charisma of Emmanuel Macron that will change anything, it’s the public’s perceptions of the role of government. And on that front Macron is performing very poorly. His rallies are inspiring when it comes to rhetorical skills, but not when it comes to content. They are marked by mostly young and enthusiastic young people waving EU flags and cheering for a candidate who solely relies on his dynamic appeal, not by a vision of how to get the country going.
And sure, there’s something refreshing about a newcomer in politics, especially when you check out the field of candidates: for far-right Marine Le Pen (49) politics is a family business: she joined the National Front aged 18, first ran for office in 1993; republican François Fillon (63) started his career as a parliamentary assistant in 1976; socialist candidate Benoît Hamon (50) became a parliamentary assistant in 1991; far-left Jean-Luc Mélenchon (66) has been involved in politics since the 1970’s and in elected offices since 1985.
But it’s not 39 that will pull France out of the mud it’s in right now. Centre-right François Fillon courageously speaks out for cutting spending (even though his track record on government spending contains a bank bailout as the Prime Minister under president Sarkozy), while Emmanuel Macron morphs into a centrist to not lose his left-wing support.
The situation with Macron seems clear: either we’re dealing with an incredibly intelligent manoeuvre to get into office and then enact drastic free-market reforms (something that is very unlikely), or an opportunistic bid to appeal to literally every voter through a sort of centrist, pragmatic and visionless candidacy that will leave us with more of the same: more spending, less freedom, no reforms.
- 1. In France, as in most of the world outside the US, the word “liberal” is associated with free market ideologies.
Powered by WPeMatico