By Oliver Green
Emmanuel Macron’s triumphant populist revolution of the status quo will do little to restore French prosperity and global stature. He won election largely by the default of being the least disliked Presidential candidate, through being all things to all people and by remaining non-committal to left or right policy positions, leaving himself with a timid, lightweight and half measured reform programme, which despite having some positive reforms, fails to resolve any of the underlying structural deficiencies in the French economy, whilst reinforcing the dysfunctional institution of the Eurozone and German mono-polar hegemony over the continent. All of this becomes apparent when examining the main parts of his reform programme in all major policy areas.
Security & Defence
His Defence and Security policy is fairly sound. Like Le Pen, he’s in favour of increasing defence spending to meet the NATO target of spending 2% of national GDP on defence, whilst recruiting 10,000 more police officers and restoring a network of field agents to combat Islamist terror, stating that his top foreign policy goal was “to kill Isis” and calling for greater co-operation with the United States to achieve it.
The French Economy & Trade
French President Emmanuel Macron campaigned on delivering a Nordic blend of fiscal responsibility and public spending. He proposed reform of the labour market which is in dire need of reform, enabling firms the flexibility to negotiate working hours and pay in order to regain some competitiveness. Macron’s economic programme sets out a rather half-hearted Nordic-style economic model for France, blending €60bn of public spending cuts over five years with a €50bn stimulus package over the same period, to be obtained from the savings made through the slashing of 120,000 jobs from France’s bloated civil service. He quite rightly intends to spur investment and growth by cutting taxes by €20bn, through reducing France’s corporation tax rate from 33 to 25%, bringing it in line with the EU average, but then intends to spend the resulting tax revenue on extending the welfare state by making entrepreneurs and the self-employed eligible for unemployment benefits, whilst keeping the budget deficit just below the EU’s limit of 3% of GDP, effectively giving with one hand and taking back with another.
He’s thankfully in favour of Free Trade, being the only candidate in the first round of the 2017 campaign to come out in support of CETA, the recently signed EU-Canada free trade deal. However, with French unemployment stuck at just under 10%, the labour market became a major politically charged issue of the campaign. Strict labour laws, including the mandatary 35-hour working week policy, are disliked by many employers but fiercely defended by the unions. Consequently, Macron backed away from a previous pledge as Economy Minister to scrap the minimum 35-hour working week rule. Instead, opting for a much watered down pledge to grant firms flexibility on overtime and the freedom to negotiate specific deals on working hours and pay, whilst vowing to leave the retirement age and pension arrangements untouched. Consequently, the French Labour Market will not gain the scale of flexibility and dynamism required to compete effectively and deliver the level of prosperity needed to pull French economy from its doldrums, such as granting the ability of French firms to hire and fire much more freely, so as to allow the French economy the scope to compete effectively again and regain its productive capacity. Instead, Macron has banked on a fully federalised Eurozone to provide the collective investment required to bail him out, subsidized primarily by the German taxpayer.
The EU & Eurozone
During the 2017 Presidential election campaign, Macron acknowledged voter’s concerns over the EU by committing to what he described as “in depth” reform of the bloc. However, he is a committed Europhile with a very definite idea on the direction such reform should take, having nothing whatsoever to with the repatriation of powers or monetary sovereignty to the member states of the zone, but rather a push toward full federalisation. Throughout the election campaign he campaigned for greater co-operation and integration within the EU on fiscal, environmental and social regulation, along with a common fiscal policy, joint finance minister and the creation of a Eurozone Parliament and full banking union, led by a reinvigorated Franco-German partnership, so as to make the zone less vulnerable to future shocks and speculation, in part fulfilling German designs for total fiscal discipline and top town control of the zone, totally ending any remaining relevance and responsibility of Eurozone member state parliaments. In addition, Macron is at heart a dyed in the wool Protectionist Federalist where Europe is concerned, proposing much deeper European integration than ever previously discussed in public, in the name of a “protective Europe”, such as the creation of an EU mechanism to stem the takeovers of deemed “important industries” by foreign firms.
Immigration
As a committed EU Federalist, Macron is wholly in favour of German chancellor Angela Merkel’s open-door refugee policy for as he put it “saving our collective dignity”, whilst appeasing voters with woolly promises to prioritise dealing with asylum requests within six months and return failed asylum seekers to their home countries immediately after being rejected. But still being in favour of limitless freedom of movement throughout the EU and Schengen area, which will continue to place pressure on France’s public services, job markets and housing.
So expect more of the same
Macron’s much heralded Labour Market reforms do not go anywhere near far enough to restoring the prosperity and dynamism of the French economy. Nor will his Europhile fanaticism restore the global standing of the French nation itself, due to the political illegitimacy of full federalisation and relegation of the nation state, coupled with the naïve reliance on the German taxpayer to compensate for the limits of his Labour market reforms at home, which the German Government will not allow in any meaningful way, as they would inevitably be saddled with the lion share of the subsidies required for such collective Eurozone transfers. Like it or not, Germany is central to the interests of preserving the status quo as the now mono-polar economic and financial heavyweight of the continent, after his victory in the 2017 French Presidential election, Emmanuel Macron became an unwitting temporary endorsement of that.
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