Will Business Beat ‘Frexit’ in French Presidential Election?

Last updated: 13 June 2023 Views: 4230
Will Business Beat ‘Frexit’ in French Presidential Election?

After a year of Brexit, Trump and all manner of upsets, it’s anyone’s guess who will win the upcoming French presidential election. While some candidates have been quick to highlight this year of upheaval, France is a unique country. The enshrinement of republican secularism, protections against populism and astrong left wing would seem to shield it from the same fates as its close allies.

There are some common problems, but the most pressing concerns are traditional ones. A recent poll of bellwether town Chartres - at a time some news outlets have stopped conducting polls altogether - indicated that more people are worried about personal and economic security than immigration.


Liberté, égalité, sécurité

For a long time, this looked like the defining factor in the public discourse. Republican candidate François Fillon (pictured above with Russian President Vladimir Putin) was not an overwhelmingly popular pick, having presided over unpopular pension schemes in 2003 and 2008. His, however, was the most comprehensive manifesto, promising a Thatcher-esque slate of economic reforms to help businesses stay competitive.

These include several changes that would provoke riots in any other election, including the end of the 35 hour week, raising the retirement age to 65, increasing the goods tax by 2% and slashing 10% of public sector jobs. However, with unemployment stuck at over 10% through the outgoing President’s entire term, there is more of an appetite for substantial change than ever.

What he wouldn’t have contended with was a sudden personal scandal. It recently emerged that the former Prime Minister had paid 800,000euros over ten years to his British wife, for work she may not have actually done. He is also accused of having paid his two children for similar work, all at the taxpayer’s expense. This has not played well for a straight cut economic reformer, and Fillon has faced calls to drop out altogether.

Fillon would have been a palatable, right-leaning option, intended to lure voters from both ends of an increasingly polarised spectrum. Instead, France faces the possibility of a hard right vs a hard left candidate.

Le Pen is mightier...

 For those in the former category, Marine Le Pen is a strong frontrunner. The head of Front National has built a more moderate image than her controversial father. Having been a far-right nationalist group under his stewardship, Marine has introduced several left-leaning social policies, while retaining the core message of ‘protecting French identity’.

What this boils down to is a strongly anti-Islam and anti-immigration message, but also a protectionist one. Le Pen is deeply opposed to international trade deals such as TTIP, and has proposed that all free trade and customs agreements be rebuked. Her manifesto also includes a 3% import tax on all foreign goods, and a new tax on foreign born workers.

Her voters come from across the spectrum, but particularly blue-collar workers such as those in the north-eastern city of Hayange, who feel abandoned and unheard by other parties. They have been affected by automation and the loss of manual jobs, but also the impact of terrorist attacks on tourism. Unlike nationalist politics in the UK and US, areas with high rather than low levels of immigration tend to be the most fervent Front National supporters.

Le Pen’s most extreme and economically dangerous policies relate to the European Union. She has proposed a ‘Frexit’ referendum similar to that in the UK, with the ultimate aim to drop the euro currency and bring back the franc. Any such overhaul, even the most basic reversion from foreign to French labour, would likely worsen France’s tenuous economy before it got better.

Left winging it

On the left of the spectrum, the Socialist candidate Benoit Hamon has been an unexpected entrant to the race, following his surprise victory over more moderate rivals in the party primaries. The former finance and education minister has sought to distance himself from the disastrous Hollande presidency with radical, forward-thinking policies. Something of a utopian idealist, he identifies with UK Labour leader Jeremy Corbyn and US Democrat Bernie Sanders.

What this translates to is a number of radical, ‘people first’solutions. Rather than attempting to protect manufacturing and farming jobs, Hamon has proposed a universal wage of 750 euros as a means to combat automation. He also intends to tax the deployment of ‘robot workers’, instead funding a new economy of environmentally friendly cleantech.

Ultimately he hopes to reduce the number of hours that people have to work each week. He’s also proposed the perfect companion piece and friend of green voters everywhere: legalising and taxing marijuana.

Many a left-wing voters’ dream, it remains to be seen whether any of his policies are actually viable, and whether he can escape the reputation of his party.

An even more fringe interest is Jean-Luc Melenchon (pictured giving the victory sign). A stalwart of the Communist Party, Melenchon is perhaps a closer analogue to Jeremy Corbyn. In reality, he’s far more left-wing and a better counterpoint to Le Pen. Melenchon is more socially liberal but equally anti-EU and anti trade deals.

He mainly differs in his economic solutions to common problems, proposing a 1300 euro minimum wage, reducing working hours and forcing companies to adopt green policies. Seeking to renegotiate with the EU rather than leave, he is offers a more viable form of radical change, and brings with him some more of the might of the left-leaning establishment.

Marine vs Macron

Perhaps her biggest rival at present however is Emmanuel Macron. A name few had heard of three years ago, the 39-year-old Macron is terrifyingly young by French political standards. A former advisor to the unpopular Hollande and briefly Minister for the Economy, Macron pushed through an eponymous business reform law before leaving government.

He is on paper more mysterious, given that there is no paper to speak of. Macron has not yet produced a manifesto, preferring to let his opponents throw barbs at each other while playing up his Justin Trudeau-like persona. 

His left wing social stances mark him out as liberally minded, as does his age. But he is a former Rothschild banker and business oriented economic minister, so the potential economic outlook is fairly clear.

Given the unusual power of the position of President, Macron would likely attempt drastic reforms to increase business competitiveness and reduce workers’ rights. This may include a more flexible working week, further pension reforms and amendments to fortune and income taxes.

This would inevitably be faced with a public and political backlash, as nobody in politics really likes Macron. He abandoned the Socialists to start his own movement, but this power play has upset the whole spectrum, and he remains too left wing for everyone else. But if it comes down to a straight fight with Le Pen, he would likely be seen as more palatable and less damaging.

The result is potentially a choice between two types of populism, not often a recipe for economic success. But while Le Pen’s plan is more ideological, Macron’s is ultimately pragmatic and conservative. While his experience is minimal, his time as economy minister and his roots in finance should serve him well. The changes may not be palatable with the more traditional sections of the French public, but in a period of continued economic uncertainty, business centric reforms may not be such a bad thing.

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