Analysis | Political stalemate in France is a risk for Europe


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Jupiter no longer ascends. The French elections have left a hung parliament, stripping President Emmanuel Macron of his majority, his authority and his credibility as a centrist bulwark against the far right and far left. Fragile coalitions at the heart of the eurozone’s second largest economy will make governance and reform difficult.

And for a European Union seeking to beef up defense, cut energy ties with Russia and pursue closer integration, the risk now is that France turns inward with little appetite for big change.

The worse-than-expected vote share of Macron’s centrist alliance (44 seats short of the majority) reflects growing frustration with his style of governance and with the health of the economy. Since he defeated far-right nemesis Marine Le Pen in April’s presidential election, Macron has kept his head under the parapet, cobbling together a technocratic government that is now dead in the water.

Against the backdrop of a shrinking economy and record 5% inflation, Macron’s lightning rod policies (such as raising the retirement age to 65) fueled the anti-Macron vote. Jean-Luc Melenchon’s far-left NUPES alliance, along with other leftist parties, struck a chord by calling for price controls and retirement at 60. jump on seats.

Macron’s visit to Kyiv together with Italy’s Mario Draghi and Germany’s Olaf Scholz did little to change his position. The vote seemed more like a demonstration of the middle class squeezed out of the economy, as described by the president of Publicis, Maurice Levy: a third does not vote, another third votes for Melenchon to protest and another third, more working-class, votes for Le Pen because they feel left behind.

At the same time, the lack of a single winner reflects the messy reality of post-Ukraine invasion and post-COVID-19 politics. The French state has exploded during the pandemic, with a debt of 113% of gross domestic product and a budget deficit of 7%. Fiscal rectitude may not be in vogue, but Mélenchon’s call for additional €250 billion in annual spending did not instill widespread confidence either.

In theory, this kind of stagnation offers opportunities. With no other group capable of taking control, the way is open for Macron to strike a deal with center-right Republicans or work with other parties on a case-by-case basis. The violent protests during Macron’s first term showed the dangers of a weak opposition, and history shows that previous presidents, both from the right and from the left, have been able to “cohabit” with political opponents when forced by parliamentary arithmetic.

But in reality, there is a high probability that sewn alliances and coalitions will be stretched to the breaking point. There are as many parties as there are personalities, the economic outlook is bleak and the terrain of French centrism is increasingly narrow. Saxo Bank’s Christopher Dembik fears this will look more like Italy’s volatile politics than Germany’s consensus building. The first proof of this will be the planned measures to boost purchasing power that will be unveiled next month.

Speaking of Italy and Germany, Macron will have to do more outreach in Europe to achieve his goals if he finds himself gridlocked at home. Domestic and foreign policy are different battlefields, but influence and leadership in Brussels coincide with economic credibility and the ability to pass laws.

So while it is a relief to Macron that Clement Beaune, his longtime ally and EU minister, has managed to win a seat in parliament, it all seems a long way from the height of Paris’ powers during Covid. -19, when he convinced Berlin to back down. -had taboos about further integration.

Pressure on political incumbents is not just a French problem, of course: Spaniard Pedro Sánchez has been dealt a heavy blow in Andalusian elections, while the UK is facing its biggest rail strike in decades.

However, while the test of Macron’s mettle was once whether France could reform itself, it will now be whether France can govern itself. Jupiter output; enter Mars.

More from this writer and others at Bloomberg Opinion:

Wartime Brexit Threats Are Doubly Wrong: Lionel Laurent

Draghi Hardens Italy’s ‘Soft Underbelly’ Reputation: Rachel Sanderson

In Germany, Scholz the Bold returns to Scholz the Smurf: Andreas Kluth

This column does not necessarily reflect the opinion of the editorial board or of Bloomberg LP and its owners.

Lionel Laurent is a columnist for Bloomberg Opinion covering digital currencies, the European Union, and France. Previously, he was a reporter for Reuters and Forbes.

More stories like this are available at bloomberg.com/opinion



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