With the support of the Atlas Network, CapX is publishing a new series of essays on the theme of Illiberalism in Europe, looking at the different threats to liberal economies and societies across the continent, from populism to protectionism and corruption.
When Emmanuel Macron left for a short holiday in August, battered by eight months of Yellow Vests street riots, his once favourable poll numbers under 30%, he enjoined his ministers to “keep fear in their belly” – this was not the time for complacency.
Two weeks on the Riviera and one Biarritz G7 summit later, the French president is had planned to have his favourite ex-Cabinet minister wrest Paris from her Socialist Mayor, hoped to broker peace between America and Iran, and announced that France will bring Russia back into a European alliance of interests.
These lofty concerns play well among the urban elites, who vote for Macron’s La Republique en Marche anyway, but not with the rest of the country. The Yellow Vests movement may have dwindled into near-irrelevance — the number of demonstrators by mid-September totalled fewer than 5,000 across the entire country – but France at large is no happier: a tinderbox with a short fuse and many conflicting and unrealistic expectations.
The Economist might swoon over the “degree of hard-nosed thinking & ambition about Europe’s future – not just the next five years but the next 50 – taking place in French circles that I haven’t encountered in Brussels or Berlin. If Europe has a de-facto capital, these days it’s Paris”, but French voters on both ends of the spectrum are bewildered by tax cuts immediately followed by tax increases; a ballooning national debt and the highest government spending ratio to GDP in Europe (56% compared to Italy’s 48.6%); unemployment still stuck at 9.1%; and an atomised political landscape where both the traditional Left and Right now barely reach voters in the double-digits.
It’s become harder than ever to pinpoint a specific “Macron line”, but whatever it is, it isn’t a liberal one. The latest security Bill to pass the National Assembly after last December’s Yellow Vests excesses, only two years after Francois Hollande’s 2016 quasi-Patriot Act (a response to the terrorist attacks against Charlie Hebdo, the Bataclan and Nice) now makes it possible to preemptively detain people suspected of being about to take part in demonstrations, and allows investigating magistrates to tap phones and messaging without a judicial authorisation.
The president’s idea for modernising France’s industry is a mix of high-handed, interventionist industrial policy and a brushed-up reliance on top-down sectoral choices reminiscent of every single one of his predecessors, from de Gaulle onwards. In his most important economic policy speech to date, Macron declared that: “Europe should…re-establish rules for competition that are compatible with [our] industrial sovereignty, and…assess champions in the light of the…global market across all its sectors”.
In late September, he announced €5bn investment into Le French Tech from well-coaxed institutional investors, with the aim of creating “25 French unicorns by 2025”. (The irony of having a government programme dedicated to create privately-held tech start-ups valued above $1bn seems to have escaped him).
French mandarins have decades of form when it comes to such pointless initiatives. There was the Plan Calcul (1966-1975), which was supposed to give birth to a French indigenous technological and information industry (it ended with American conglomerate Honeywell buying up most of the would-be champions from receivership).
Then there was the Plan 3T that was supposed to push back Japanese intruders like Sony and Mitsubishi and create a French and European consumer electronics industry in a government-sanctioned alliance between Thompson, Philips and Grundig. Among other proprietary technologies they were meant to promote a new video standard called V2000, which ended up being superseded by Betamax and VHS. France’s 1970s nuclear energy project was more successful, but it faced in effect no competition, since the government would never allow the likes of Westinghouse into the French market.
Macron seduced France two years ago by vowing to battle entrenched interests, reform the country’s creaking welfare system, and foster more equality between the haves and have-nots. He was young, he was optimistic, he had displayed a can-do attitude in government (the better to make his rivals look antiquated); he had the aura of competence of France’s uber-mandarins.
The fact that he had never run for local or national office in his life and had only served 16 months as Economy Minister was actually a powerful positive: in France as elsewhere, voters wanted to kick the incumbents out. Macron’s programmatic opus, an early 2017 best-seller, was modestly entitled “Revolution”.
Macron’s 2.0 democratic credentials were burnished by his spectacularly successful grassroots initiative: over 200,000 volunteers crisscrossed the country, ringing doorbells and engaging in campaign debates. They, too, made “normal” political parties look old and creaky. A general election followed the Presidential one, and 304 largely inexperienced En Marche MPs were sent to the National Assembly (out of a total of 577). Macron cherrypicked a number of experienced cadres from both the Socialists and Republicains to act as permanent whips, thereby simultaneously weakening the “classic” parties and guaranteeing himself a docile Parliament.
As a result, actual opposition in France was to be found in the streets and on social media. Macron’s opponent in the presidential runoff, Marine Le Pen, may poll a clear plurality of 36% in a PR vote, such as in the recent European elections; but she represents a tame protest vote, as not even her own troops, or the Yellow Vests themselves, believe in her basic competence.
The president’s policies oscillate according to polling and estimated image gains. As a result, the supposedly “courageous” reforms promised two years ago are now being watered down. Changes to the emblematic pensions reform, which was supposed to flatten some 40% different schemes into a single pay-as-you-go system (the French default), are in the process of being leaked to various media, after which pollsters determine what will be political poison and what can fly – a process that encourages protest itself.
It is hard at this stage not to think of Jacques Chirac, a president whose forceful manner hid terminal domestic policy indecision. Six months after his 1995 election, a two-month general strike protesting against a sweeping pensions reform brought the country to a halt from which Chirac’s programme never recovered. To compensate, with his Foreign Secretary (later PM) Dominique de Villepin, Chirac threw himself into high-profile foreign policy activism, reviving the Gaullist notion of France as a non-aligned country, supporting the Palestinian leadership and culminating with his opposition to the Iraq war.
Nominally a right-winger, Chirac – an ENA elite government school graduate like Macron – had Macron’s technocratic government sensibility. Unlike Macron, this chateau-owning scion of the bourgeoisie, married to an aristocrat, has an unparalleled common touch, which makes him, to this day, one of France’s best-loved elder politicians. That sets him apart from Macron, whose perceived arrogance makes him a lightning rod for protest.
Macron believes sincerely in his top-down, high-tech plans for a more modern France, but he has no room for manoeuvre, especially as the protesters’ demands have become largely unrealistic. Over half the French population believes that the country is riven by deep inequalities. In reality, salaries in the band above the 10% poorest and under the 10% richest range from 1 to 7. More important, once the comprehensive French redistributive system has been at work, this drops to 1 to 2.5, making France a country more egalitarian than Sweden.
A regional Prefet who had received delegations of angry Yellow Vests during last winter’s unrest said the chief demand was a ceiling to all monthly salaries at €2,000. The President knows perfectly well that such a measure would make it impossible to fund the country’s redistributive welfare system, but he cannot say it, since his enemies’ tag of “le president des riches” has stuck. All he can hope for is that good photo ops with international leaders whom the French believe he dominates, from Donald Trump to Boris Johnson, will revive his popularity. That may end up being popular, but revolutionary it certainly isn’t.
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