Prediction: French Election Will Produce Little Reform

The landslide election of Emmanuel Macron as France’s new president with 66% of the vote is seen as a breath of fresh air for Europe. Macron is 39 years old and dashing. He is married to his former schoolteacher, who is 64.

He calls himself a “centrist”. He won the primary over two traditional party candidates (socialist and conservative) and over the more conservative Marine Le Pen in the general election. Le Pen promised to crack down on terrorism and pull France out of the European Union.

France’s two big problems are a stagnant economy and terrorism. If Macron can’t do the job, Le Pen will be back in the next election in 2022. Germany’s foreign minister Sigmar Gabriel, said: “If (Macron) fails, in five years Mrs. Le Pen will be president and the European Union project will go to the dogs.”

Macron is described this way by Tom Rogan in the Washington Examiner:

Macron is avowedly pro-American. He supports NATO and cooperation on issues of shared concern. This includes countering Iranian influence in the Middle East and the rise of Islamist terrorist organizations in Africa.

Macron is pro-trade. He wants to make France more economically productive, competitive, and outward-looking. That matters in the context of U.S. trade with France.

Last year, U.S. exports to France stood at just under $31 billion, and imports at $46.8 billion. Yet as a key influencer on Angela Merkel, Macron has the ability to push for more liberal trading arrangements between the European Union and the U.S. This is a good thing for American workers. Because of France’s comparative high-wealth economy, Americans stand to benefit from increasing consumer demand in France. If (the United States) can reduce French subsidies for their domestic industries, we’ll make high-tech, high-value American goods more accessible to the French people.

Let us hope that Macron does all these wonderful things, but he probably will not. Macron was plucked out of obscurity by the outgoing socialist leader Francois Hollande, who did not run for a second term since his approval numbers had actually fallen into single digits.

Will Macron create a new and better France?

Perhaps a little. An investment banker by trade, Macron is stuck with an entrenched socialist bureaucracy and a powerful communist front, particularly in the radical labor unions. These two institutions are very difficult to uproot or to oppose. The unions are notorious for even taking business executives hostage in labor disputes.

The French people know in their hearts that they need to pare back government spending and taxes and reduce union power and regulation to create a more vibrant economy. But the unions and the government workers will resist every step of the way. If Macron gives in, he will be finished. Reports AFP:

(Macron) has promised to heal a fractured and demoralised country after a vicious campaign that has exposed deep economic and social divisions, as well as tensions around identity and immigration.

This sounds a lot like the US and Trump. AFP reports:

…Unknown three years ago, Macron is now poised to become one of Europe’s most powerful leaders, bringing with him a hugely ambitious agenda of political and economic reform for France and the European Union.

The result will resonate worldwide and particularly in Brussels and Berlin where leaders will breathe a sigh of relief that Le Pen’s anti-EU, anti-globalisation programme has been defeated.

…Macron will now face huge challenges as he attempts to enact his domestic agenda of cutting state spending, easing labour laws, boosting education in deprived areas and extending new protections to the self-employed.

… His En Marche movement — “neither of the left, nor right” — has vowed to field candidates in all 577 constituencies, with half of them women and half of them newcomers to politics.

…Furthermore, his economic agenda, particularly plans to weaken labour regulations to fight stubbornly high unemployment, are likely to face fierce resistance from trade unions and his leftist opponents.

…Macron has said he wants continued intelligence-sharing with the United States and cooperation at the United Nations and hopes to persuade Trump not to pull the U.S. out of a global accord fighting climate change.

OK, let’s look at these issues:

*The ‘climate change’ part says a lot, i.e., Macron is really a left-winger. This is bad news for France.

*Any attempt to weaken labor regulations is going to be very hard to do; the unions will go all out against reform. Yet these labor laws are killing the French economy. Labor laws in France make it almost impossible for an employer to fire an employee and thus employers just don’t hire workers in the first place, leading to high unemployment. It is that simple. It is typical of how socialist policies produce the opposite effect that they claim.

*Cutting state spending? In France? Again, it would be hard to do. The French love their welfare state and think that massive state spending is the key to everything. And in a way that is true – this spending is the key to France’s economic stagnation. (France has about 80% of the standard of living of the US, and much higher unemployment.)

*The second Big Issue for France is terrorism, which brought down Hollande in the continuing terror attacks of the last few years. Le Pen promised to fight the terrorists. If Macron fails to stem the attacks, Le Pen will be elected in 2022. Le Pen is already ramping up her campaign for the future as the only real opposition to Macron, and the only person willing to smash the terrorists.

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