Tag: Macron

Dans l’Ombre de Sully

Sully!

I confess that on more than one occasion that I have joked to French friends that ‘Sully’ (Maximilien de Bethune, Duke of Sully) the chief minister of France for twenty years around the turn of the seventeenth century is an ancestor of mine. Most are unimpressed, and American friends suggest I would be better off being related to the other ‘Sully’ (Captain Chesley Sullenberger the US Airways pilot who famously landed his plane on the River Hudson).

Sully, the elder that is, is worth pondering for two reasons. First, he was one of the longest standing holders of the office of prime (chief) minister of France, and secondly, he was the architect of some of the early, institutional apparatus that forms France’s highly centralized system of government. Both of these elements are now in focus with the replacement of Edouard Philippe as prime minister by Jean Castex.  

With many other senior ministers still in place, the removal of Edouard Philippe is a political statement by Emmanuel Macron that he and he alone is the captain of the ship of state, with M Castex in the boiler room running the complex machinery of the country. For his part, M Philippe, now mayor of Le Havre, may spend his spare time writing (check out ‘Dans l’Ombre’ written with Gilles Boyer) and cultivating a network of regional support that might equip him to challenge Macron for the Presidency. If so, it will be an enthralling battle.

However, there are other reasons to focus on France, not least next week’s 14th July celebration.

From a European point of view, a lot rests on the collective views and behavior of the French government – which in a country with relatively tame inequality, is one of the most elitist and homogenous in terms of personnel and thought process. There are maybe three challenges to watch.

The first is Europe. With the French-German political engine now whirring again, the approaching end of the Merkel era and the long running absence of a strong German foreign policy, Quai d’Orsay will be the driving force behind EU foreign policy. This is a positive given the policy energy of Macron and the unambiguously pro-European stance of his administration. It will be problematic in the sense that France, as Europe’s military power and a UN Security Council seat holder, also prosecutes its own foreign policy – notably on Russia and Libya.

In this way, France must decide whether it is what I’ll call a ‘great’ country or a ‘strong’ country. ‘Great’ countries have had or desire empires, they have nuclear missiles and soldiers stationed abroad. Their foreign policy is grand, ambitious and causes headaches for other nations. The US, China, Britain and Russia fall into this category. France is easily a peer of theirs.

‘Strong’ countries are the poster children of the post-coronavirus era. They are generally well lead, but not bumptiously so. They value public goods like education and healthcare, have well thought out tax and welfare systems, and are resilient to shocks. Norway, Singapore and New Zealand are in this category, and France might wheedle its way in too if we consider factors such as its state lead approach to innovation.

To draw these strands together, France’s challenge is to make Europe more ‘great’ and itself more ‘strong’, especially in the sense of opening itself up to and integrating more diverse influences. Corporate France is an example, very few women and few foreigners run French companies – unlike say the UK. This is just one rigidity in the French system. Another is a groupthink across the state on the Cartesian need for uniformity. This is dangerous when applied beyond French borders on the European stage.

The mantra that there should be a common fiscal policy amongst nineteen very different euro-zone countries risks handicapping many and robbing the system of the flexibility it needs in the context of a common monetary policy. Moreover, as a mantra it allows policy makers to be blind to the reality that mounting debt loads and perennially weak fiscal deficits have made the fiscal rules of the euro-zone meaningless, to the point that they are replaced by the ‘rule-all’ policy of the ECB.

If Emmanuel Macron is a revolutionary politician, as he tells us, then his economic policy must do at least two things. The first is to reduce debt – here the sale of state assets is perhaps less unpopular than cutting state spending. The second, more important one is to cultivate the narrative that economic growth is positive and necessary. France’s lack of growth (trend growth over the last ten years is just above 1% ) is perhaps the one thing that distinguishes it from ‘great’ countries (e.g China, US) and ‘strong’ ones (i.e. Ireland, Singapore and New Zealand. Macron’s policies to help entrepreneurs for example are meaningful, though underestimated beyond France. He now needs to redouble his efforts.

The Duc de Sully took twelve years to turn around the French economy (1598-1610), Emmanuel Macron has two years left to secure a rebound.

Have a great week ahead,

Mike

Will the political recovery be U, V or L shaped?

Collecting votes in Ireland

The term ‘paradigm shift, rather like ‘black swan’, is often misused and overemployed. However, the increasingly fractured world order is beginning to throw up more and more examples of genuine paradigm shifts, such as the result of the recent Irish election and the turmoil at the heart of German politics.

Both correspond to the broad terms of a paradigm shift – the crumbling of a long-established order, a fallow interregnum marked by disorder and questioning, followed by the making of a new way of doing things.

In the case of Ireland, the aftershock of its financial crisis has seen Fianna Fail slip from a period of multi-decade political dominance, Fine Gael’s failure to supplant Fianna Fail, the rise of many independent TD’s (members of the Dáil, the Irish parliament) and new parties, and now the sudden rise of Sinn Fein. When the dust settles, the Irish political spectrum will likely follow more traditional lines, Sinn Fein leading the left, Fine Gael to the right with Fianna Fail disintegrating towards both the left and right.

In Germany, Angela Merkel’s decision to welcome over a million refugees into Germany was her ‘poll tax’ moment, and this set in train the rupture with the stability that stretched back to Helmut Kohl. German politics is now in the disordered interregnum, where parties of the centre are trying to adjust to new issues (climate change, immigration, geopolitical shift), as those of the fringe attack the old consensus. The easy populist solution would before a centrist politician to spend some of Germany’s budget surplus, though this may not resolve the identity crisis in German politics and society.

The cases of Ireland and Germany can be added to a heap of plausible examples of paradigm shift – Brexit and Trump obviously, the role of central banks in markets and the impact of technology on our lives. As such, many people no longer push back on the idea that we live in a ‘world upside down’.

To come back to politics, US academic Larry Diamond has written of a democratic ‘recession’, and political theorists might, as economists did then years ago, debate whether the political recovery will be U, V and L shaped.

In that respect, what is of interest for politicians in Ireland, Germany and the likes of Spain, is to see how other ‘paradigm shifts’ are evolving.

In Europe, Emmanuel Macron’s playbook (perhaps I should say ‘stratégie’ or Grand Plan) has been to capture and hold the political centre, which in my view makes a great deal of sense. He has also aligned the apparatus of state, in that most institutions willingly work to his agenda (the same would not be true if say Jeremy Corbyn had become British Prime Minster). Given the economic and political tasks he is taking on in France and Europe respectively, his performance is easy to criticize, and many take advantage (as the Griveaux incident shows).

Viewed from Cork or Dublin though, he has two blindspots. One is to make the style of government more human and grass roots driven. The other is to take credit for the sharp fall in French unemployment. If unemployment in France falls below 7% by the end of this year it will have a wholly underestimated, positive effect on state finances, on ‘happiness’, human development and on the integration of immigrants. Macron should acclaim this achievement more.

One politician who would not be shy of doing so is Donald Trump, who while not consciously holding the centre, is using the prospect of rising financial wealth, a strong economy and his willingness to harry economic competitors as an inducement to Americans to tolerate ‘four more years’. Unless the Democrats can reverse the shift to the left that most of their candidates have taken, they risk being perceived to demand that middle America commits to an uncertain economic future.

This sense of the unknown was what finished Labour in the UK. However, instead of cementing his political capital at the centre of UK politics, Boris Johnson, by shedding the services of so many capable Tory MP’s and ministers (Julian Smith the former Northern Ireland Secretary was voted politician of the year by the Spectator) is drifting towards the touchline of British politics.

A person to person comparison with say the macron government, or even with the cabinets of John Major and Tony Blair, shows the new Johnson cabinet in a poor light. This makes me think that the paradigm shift in UK politics is by no means over. The centre is being deserted and there is an opportunity for Labour, or more likely in my view, a new party, to fill it.

Have a great week ahead,

Mike