As French voters go to the polls on April 10 for the first of two voting rounds, gone is the enthusiasm or interest in the election of 2017, when Macron came to power as the youngest leader since Napoleon Bonaparte, with a new party promising to sweep out the establishment, knock out a rising Europhobic far right and bring about a liberal “revolution.”
Yet this year the stakes for France, Europe and the world are even higher in many ways. With Germany’s new coalition government still finding its footing after the Angela Merkel era, the European Union’s second biggest economy and only nuclear power could well be leading the continent’s response to a high Covid-19 debt load, a brutal war on Europe’s doorstep and a costly shift away from fossil fuels.
It’s not just the combination of pandemic and war that is smothering excitement on the campaign trail. Macron has changed his tune — the former disruptor is being cast as protector-in-chief by an entourage seeking to keep him above the fray. Wags have named it the “eiderdown” plan: sleepy, safe and padded with budget giveaways. Macron’s legacy and leadership are to speak for themselves. He’s avoiding debates with rivals.
The ennui was evident at a recent campaign stop in Avesnes-sur-Helpe, a small town 20 minutes from the Belgian border. As a few locals hurled anti-Macron insults outside the red brick building, a parade of panjandrums rose up inside to defend Macron’s record before an audience of 150 voters, local officials and party faithful. Despite being “unlucky,” facing protests, a pandemic and now a war on his watch, they said, Macron had delivered reforms, tax cuts and spending that had changed France for the better. Warning of the rise of his far-right nemesis Marine Le Pen, a dangerously close second in the polls, one minister asked: “Who do you want in charge?”
Attendees applauded and joined the president’s crew in a lusty rendition of the Marseillaise. The appeal to centrist values and crisis management has been enough to keep Macron top in the polls, but not enough to stop Le Pen climbing by the day. Voter apathy has been contagious, with turnout projected at a record low.
Which begs a question: If a candidate is running on his record, what should we make of Macron’s legacy after five years in power? To what extent has his mission to transform France succeeded? And could it all be reversed by a far-right resurgence?
Compared with the stasis of the past 20 years, France has certainly seen changes. Energized by reforms, its economy has weathered the Covid storm better than others; it ranks fifth in Bloomberg’s Covid Resilience index. France’s influence in Europe has risen. All that has happened even as its establishment political parties have steadily declined.
Yet Macron’s glass was so big that it could never be half-full. Much remains undone. Some plans outright flopped. Political polarization and social divisions, meanwhile, have deepened. They could produce a late election upset by Le Pen. And even if Macron wins, these forces won’t disappear.
“The tensions on display during the last presidential term have been unheard of, and only a pandemic was able to keep them relatively contained,” Jean-Philippe Derosier, of Lille University, said last month. Macron the revolutionary delivered change, but he may not avoid another revolution before long.
One change Macron can claim is the performance and perception of France’s economy, long caricatured as a basket case. Even after protests that stopped his reform agenda, and a pandemic that dealt the worst recession since World War II, he’s left the economy in better shape than he found it.
Unemployment is at a 15-year low, economic growth is outpacing Germany’s and corporate investment has rebounded.
Calling that a “revolution” might be a stretch: France’s debt-to-GDP ratio of 113% is among the highest in the euro area. Its social spending is among the highest in the developed world. And Macron’s pre-Covid bid for a “Copernican revolution” in the country’s Byzantine pension system fizzled in the face of protests and the pandemic.
Yet when put into context, Macron’s effective “step-by-step” reforms have set him apart from his predecessors Nicolas Sarkozy and Francois Hollande, who were forced to backtrack on many of their pledges. Their failures made Macron, whose brief ministerial career had yielded small-bore successes in liberalizing bus routes and Sunday trading, look in 2017 like France’s next homme providential — a term used by historian Jean Garrigues to describe the savior figures embraced by elites in times of crisis throughout history.
Macron’s early reforms as president made hiring and firing easier, capped employment tribunal rewards and created a bigger window for companies to negotiate a 35-hour workweek. Trade unions had neither the support nor the stomach for a fight.
He also passed controversial tax cuts that earned him the nickname “president of the rich” — slashing a levy on net wealth to cover only property, cutting corporation taxes to 25% and instituting a flat tax on dividends. “He’s the right-wing president we never expected,” one rival exclaimed in 2018.
In a modern twist on the post-Napoleonic monarchy’s offer of 1 billion francs to aristocrats who had fled the revolution, Macron’s tax cuts and investor-friendly reforms stemmed brain drain and brought back exiles who were either filling the trading floors of investment banks in London or the golf resorts of tax havens abroad, data from the French prime minister’s office and French consulates suggest. Efforts to foster a more attractive environment for foreign direct investment, symbolized by Macron’s glitzy “Choose France” summits at the Palace of Versailles, paid off in a pre-Covid rebound in volumes measured by the World Bank and a bump in the annual rankings of the EY consultancy.
Beyond the well-off bankers bidding up apartments in Paris to eye-watering levels, broader property tax and income tax cuts have perked up the middle class. These were accelerated when protests over the cost of living by workers suffering wage stagnation — the so-called gilets jaunes, or yellow vests — called for a counterrevolution of sorts from Macron, in this case backed by 17 billion euros of budget giveaways.
Macron’s tendency to write checks ramped up after Covid-19, as exemplified by 100 billion euros in pandemic stimulus, and his more statist stance today is dubbed “the protectionist revolution.” Still, the common thread connecting Macron the disruptor and Macron the protector has been bringing more people in an aging population into the workforce and shifting resources away from retirees.
Apprenticeships have boomed, as have bonuses for those hiring workers under 26 years of age. France’s furlough schemes ensured that jobs were saved, avoiding deep economic scarring despite a painful recession.
And while talk of reindustrializing France after decades of factory closures remains more hope than reality, economic gains from stimulus spending are being felt even in former manufacturing heartlands, where Le Pen’s blue-collar base has felt abandoned by the state and impoverished by waves of deindustrialization.
Funds have been poured into green-energy projects like vehicle retrofitting at Greenmot or industrial production at AvosDim, which manufactures curtains and blinds. “This is the most business-friendly environment we’ve ever seen,” AvosDim founder Adrien Lombart says. Jerome Dron, founder of Redison, a music-technology startup that tapped a regional fund supported by the state, says the cash was a real “boost.”
Macron’s other big ambition beyond the economy was to liberalize the French state. If one plank of his legacy was a state of entrepreneurs, the other was the entrepreneurial state. It was to be remolded in his image: younger, more meritocratic, more digital, more open to competition and more McKinsey-ish. Macron in 2016 called the profligacy of the state an “act of cowardice” on the part of French governments.
Yet had Macron’s 2016 manifesto imagined France’s current level of public spending and expansion of the civil service, commandeered by a head of state determined to protect supermarket chains from foreign takeovers and ordering state utility Electricite de France SA to cap power bills, it might have been subtitled: “So What’s New?” The country today has 170,000 more civil servants than in 2016.
Covid shifted outrage from the over-allocation of state resources to their under-allocation. Furlough schemes and a “whatever-it-takes” approach to state spending, backed by a well-oiled bureaucracy and regulated economy, earned praise. The highly centralized Parisian administration got the blame, however, for mask shortages, nurses’ poor pay and patchy public services in local areas. And France’s inability to develop a Covid vaccine of its own exposed a lack of spending on innovation.
Meanwhile, Macron’s pledges to make the state more efficient have become increasingly rhetorical, focused on technocrats groomed in France’s top academies (where he himself studied). His symbolic war on the elite, whom he accused of “betrayal,” has veered into populism. He accused the diplomats of the Quai d’Orsay of working as a “deep state” against his plans to bring Vladimir Putin in from the cold. He waged a long internal battle with his own government to shutter the Ecole Nationale d’Administration and the hypercompetitive rankings that decide who gets the most prestigious postings. He opened their ranks to outsider applicants.
For Chloe Morin, a former government advisor, Macron has scored only small victories against those she calls the “un-movables,” the technocratic advisors and top civil servants who pack the corridors of power. She cites the ENA’s overhaul under a new name, his appointment of a new wave of prefets — the emissaries of the state who are spread far and wide to oversee policy — and his renunciation of his own pension rights as president. Yet the cozy world of dominant elites in France in her view remains best summed up by a cooking analogy: “Any object inserted into a pickle jar will, over the course of several weeks, become a pickle.”
Lionel Laurent is a Bloomberg Opinion Columnist. Source: Bloomberg