Electoral Relief Sweeps Europe

08 May 2017

Electoral Relief Sweeps Europe image

 Henley executive education guest speaker and political risk consultant, Dr Elizabeth Stephens, shares her views on yesterday's French presidential election results. 

The sigh of relief breathed in Berlin last night as Emmanuel Macron, the 39-year-old former Rothschild banker, secured victory in the French presidential election, was audible across Europe. An unabashed Europhile occupies in the Élysée. The European project is back on track. 

Is the election result really that straightforward?

 While Macron’s victory means that the EU will be more confident in its negotiations with Britain, the confluence of interests between Berlin and Paris may well be limited. France’s stagnant economy has meant that for years the most important relationship in European politics has been unequal and German hopes that in Macron they may have a more equal partner are premature.

In the final round of voting, the French may have backed a pro-European candidate over Marine Le Pen, leader of the National Front, but the victory is far from emphatic despite the 66% - 34% headline. Over 12 million voters abstained and 4.2 million spoiled their ballot papers, against the backdrop of first-round of voting where 41 percent of the electorate backed candidates committed to taking France out of the EU; Marine Le Pen and the leftist Jean-Luc Melenchon. That Francois Fillon, the centre-right candidate, secured 20 percent of the vote in the first-round despite being besieged by a corruption scandal is indicative of the true sentiment of French voters.

The reality of French politics is that in an attempt to neutralise the appeal of Le Pen, Macron threatened Berlin with an inevitable ‘Frexit’ if the EU did not embark on a programme of significant reform. The question he left unanswered is what his response will be if Berlin, as is likely, say no to a common fiscal policy, a joint finance minister, a Eurozone debt instrument and completion of banking union. If his response to a German ‘no’ is weak, the future of his presidency will differ very little from the past.

Macron does not have a mandate for radical economic innovation.

Much of France is against German Chancellor Angela Merkel’s austerity-led reforms. Rather than introducing tax cuts, labour deregulation and slashing the welfare state, Macron is more likely to press Germany to permit a looser fiscal stance to mitigate the pain of reform. As such, he will disappoint his German counterparts and disagreement over economic policy will endure.

En Marche!, the movement Macron heads, must become a party within weeks if he is to secure a clear parliamentary majority to reinforce his presidency. In the absence of a majority, political stability will depend upon the Republican and Socialist parties, bruised by their historic defeat, cooperating with the centre. That pragmatism will prevail is far from certain.

And herein lies the fundamental challenge to the European project. Right-wing parties are already in power in Poland and Hungary, whilst in the Austrian, Dutch and French elections, radical far right parties succeeded in altering the tone of the political debate and forced mainstream candidates to shift to the right.

The radical vote is a ‘wake-up call’ call ahead of June’s parliamentary elections in France.

The far-right may have failed to win high office in Europe, but they have captured the imagination and votes of millions of Europeans. It is too early to say the populists have been halted. If the EU project is to succeed, its leaders need to devise ways to ensure the costs and benefits are more equitably shared by all. If Macron’s new way turns out to be a repeat of the old, Le Pen will be back in 2022 with an even stronger platform.

 

 

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