Emmanuel Macron has jumped from the frying pan into the fire. He must now play second fiddle to an ideological Left that poses a much greater threat to economic sanity than Marine Le Pen’s Right-wing Rassemblement National.
The stated intent of the new Front Populaire is to soak the rich with wealth and capital taxes, reverse Mr Macron’s free market reforms, impose price controls on food, fuel and energy, and return France to the wonderland of retirement at 60.
It is as radical as its forebear under Léon Blum in 1936, which led to the ejection of France from the fixed-exchange Gold Standard in short order. It openly calls for a violation of EU budget rules, sorely testing German political consent for the euro.
The Montaigne Institute estimates that the total package, if ever implemented, would amount to a runaway fiscal expansion worth €179bn (£151bn) a year. That adds up to 6.8pc of GDP, several times greater than the immortal Truss budget.
This is in a country where the fiscal deficit was 5.5pc of GDP last year and is on a worse trajectory so far this year, unlike the austerity under way in Germany and most of the eurozone. France already faces an excessive deficit procedure as Brussels reactivates the EU Stability Pact.
“It is exorbitant and would destroy everything we have achieved over the last seven years. The immediate risk is a financial crisis,” said outgoing finance minister Bruno Le Maire.
Markets are betting that almost none of it will ever happen. Risk spreads on French debt have fallen this week. You would hardly know that France is even less governable than it would have been under last week’s scenario, a cohabitation with Le Pen’s Rassemblement.
On paper, the hard Right was planning one-and-a-half ‘Liz Trusses’, or a fiscal blitz worth 3pc of GDP. In reality, it was preparing a wholesale retreat after an audit of the national accounts, determined to prove itself orthodox on the economy.
“It would have been just like Meloni in Italy. There was all that fuss and then nothing bad happened,” said Professor Brigitte Granville, author of What Ails France.
Markets will instead have to deal with an ideological Left bent on pushing France’s worst economic pathologies to fresh extremes, lifting the state share of GDP from 58pc to a world-beating 60pc.
The French treasury says plans to raise the minimum wage by 14pc, with no corresponding rise in productivity, would cost 500,000 jobs and push large numbers of struggling family businesses over the edge.
Investors are assuming that this is just political noise: the Sun King will again form a centrist coalition under his control with a few concessions at the margin as if nothing had changed. Mr Macron clearly thinks along these lines, gambling that the Left will tear itself apart soon enough.
Perhaps it will, but as matters stand the new Front Populaire commands the most seats and will be proposing a prime minister on its own terms this week. All its leaders have warned Mr Macron against trying to rip off parts of their united bloc to keep the old game going.
“The message of the vote is categorical. The president must accept his defeat, and not try to twist the outcome in any way. The new Front Populaire will implement all of its programme, and nothing but its programme,” said Jean-Luc Melenchon, Jacobin chief of the hard-Left France Unbowed.
One thing is clear, Mr Macron has not defeated the French hard Right. The Rassemblement is today the biggest single party in the National Assembly by a wide margin. Under his watch – and because of him – it has risen from eight seats in 2017, to 89 seats, in 2022, to 143 seats in 2024 (with its allies), securing ten million votes, more than any other bloc by far.
It would have won even more seats had it not been for the gaming of the electoral system – mostly for purposes of political self-interest, though dressed up with much moral humbug.
“Our victory is merely postponed,” said Le Pen. She has been spared the tortured task of fiscal austerity, waiting in the wings as others are blamed for hard times. The political and economic cycle will now work to her advantage.
Historian Maxime Tandonnet says it is a heroic misinterpretation of events to think that Mr Macron has achieved anything other than a fiasco with his wild snap-election. “Operation Jupiter has degenerated into the worst possible scenario. It is a total impasse,” he said.
He described the election as a “festival of manipulation that erodes popular legitimacy”, taking the French people for fools. The ritual vilification of the hard Right relies on ever greater doses of “political fiction” and a vast campaign of mystification.
“The ‘anti-fascist’ brainwashing was operating in top gear. Once again, France succumbed to hysteria. The Rassemblement suddenly became, for the occasion, the ‘party co-founded by the Waffen SS’. Senior civil servants and magistrates advocated disobedience and the unions declared a blockade, backed by the blackmail of extreme Left violence,” he said.
Those who follow French politics know that Mr Macron has actively promoted the Rassemblement as his preferred foil, when it suited him, to the point of rebuking his own prime minister for playing the Vichy card. The cynicism is breathtaking.
But what Mr Macron has done by teaming up with his enemies on the Left, for tactical advantage, days after calling them a civil war risk, is to become a prisoner of their agenda. The French business elites understood this even before the shock upset on Sunday night.
Le Figaro described the mood as funereal at their mini-Davos in Aix-en-Provence over the weekend. It was lost on nobody that France has swapped roles with Britain, now a safe-haven, admired for its miraculous stability. “We’re becoming irrational just as the United Kingdom becomes rational again,” said Pierre-André de Chalendar, the chairman of Saint-Gobain.
The difference is that the UK has elected a centre-Left government that broadly reflects the centre-Left mood of the country. France has given birth to a socio-political Frankestein. A deformed election has allowed the Corbynista Left to win a victory against nature in a country that leans heavily to the Right. This foretells serious trouble.
Two outcomes are now likely. Either Mr Macron ignores the visceral repudiation of the French people, succeeds in preserving the status quo with another stitch-up until the volcano erupts; or he accepts the verdict of his own rigged electioneering and agrees to share real power with the Left, gutting his own reforms, and putting France on a collision course with Brussels, bond vigilantes, and economic reality.
Would it really have been worse to let democracy run its course?
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