Macron Optimism Disguises Historic Meltdown in European Politics

  • Presidential hopeful could be the last chance against radicals
  • The question is whether he suffers the same fate as others

What a Macron Victory in France Means for Markets

Emmanuel Macron, the favorite to win the French presidency next month, has been greeted as a potential savior for financial markets and the European Union. That requires a leap of faith.

The problem is he could be heading into territory that sank others before him. The challenge of reforming France was too much for former President Nicolas Sarkozy and is only getting harder as a new divide between champions of nationalist protectionism and defenders of open borders realigns postwar politics across the western world.

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Europe is experiencing a political “earthquake” comparable to the era of industrialization, which produced many of the traditional political parties whose support is now collapsing, said Edoardo Bressanelli, a politics lecturer at Kings College in London. That seismic change allowed Macron to fill the vacuum as the Socialists and Republicans were driven out of the presidential race for the first time in six decades. But it also threatens to swallow him up.

The risk was exposed on Wednesday outside a soon-to-close Whirlpool Corp. plant near his hometown of Amiens, northern France, as he tried to explain to protesters the importance of respecting the rights of foreign investors.

A woman told him they were tired of governments from the establishment making promises and doing nothing for them. “I’m not the left, I’m not the right,” Macron shouted over the swarm of angry workers. His opponent, far-right candidate Marine Le Pen, meanwhile has promised to keep the factory open. She attacked Macron as a proponent of “savage globalization.”

The question isn’t so much whether Macron, 39, wins on May 7 as whether he will ultimately succumb to such forces. And if he does, Le Pen’s populist alternative will be waiting in the wings.

“You have to ask what is Macron going to do?” said Jan Zielonka, professor of European politics at Oxford University. He is writing a book, “Counterrevolution,” that describes how the current backlash stems from before the financial crisis or the rise of China to liberal reforms in the 1990s. “He has to figure it out quickly and, these days, he will have very little time.”

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One problem is that Macron’s year-old En Marche! movement has no legislators in the current French parliament, and it will struggle to win the 289 seats needed to secure a governing majority in June elections. So he will still need to rely on lawmakers from the defeated main parties to form a government and drive through legislation.

They may be conflicted about whether to help him succeed, according to Mark Leonard, director of the European Council on Foreign Relations. If they do, they risk losing voters to En Marche! If they undermine him, they may squander a last chance to keep the kind of world they want, boosting Le Pen’s likely next bid for the presidency in 2022.

“For the socialists in particular, it’s a choice between death by asphyxiation or drowning,” said Leonard.

Messy Transition

In 1967, a pair of political scientists wrote a seminal paper on what they called the “freezing hypothesis.” They noted that ever since the emergence of socialist and conservative parties to champion either side of the social divide created by 19th century industrialization, the same parties had mostly held sway even as societies changed. The freeze is now over.

A new cleavage based on nationalism is displacing issues of social class and income distribution as an organizing principle for politics. Traditional parties across Europe are losing support and the transition is proving messy everywhere.

In the Netherlands, where the barriers to entry for political parties are low, new ones have become significant players in parliament to represent and promote the nationalist reaction. In March elections, the anti-immigration, anti-Muslim Freedom Party came second, while the center-left Labor party’s share of the vote collapsed to just six percent from 25 percent.

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In the U.K. and the U.S., where the voting system makes it much harder for new parties to muscle in, the established parties of the right -- the Republicans and Conservatives -- are themselves mutating to envelop the angry backlash.

Germany, a major beneficiary of internatonal trade, is so far proving an important exception to the populist contagion.

Globalism v. Nationalism

This new political fault line is nowhere more clearly on display than in the head-to-head for the Elysee Palace. Le Pen wants to pull France out of the euro and the EU, halt immigration and harden the nation’s borders. Macron, a former Rothschild banker, supports global trade, immigration and the EU.

Should he prevail as expected, the risk is that Macron suffers the same fate as another hope for European reform, former Italian Prime Minister Matteo Renzi.

He came to power in 2014 as the fresh face who would save his country’s economic and political system by reforming it from within, just as Macron is promising to do for France. Renzi, however, resigned late last year. His failure is again driving Italian voters toward upstart populist parties who promise to tear the system down.

Opinion polls are projecting an easy win for Macron, a former economy minister who has never held elected office. That’s even after Le Pen and another anti-establishment candidate, Jean-Luc Melenchon of the left, together took about 40 percent of the ballots.

The risk is that Macron goes down in history as just the latest French president to promise and fail to deliver the reforms that the $2.4 trillion economy needs to stimulate jobs, growth and faith in the political system.

“The first round vote actually shows that France is in state of fundamental crisis -- a crisis of state and a crisis of economy,” said Dominique Reynie, professor of politics at the Sciences Po institute in Paris. “I can tell you that if a presidential adviser can within the space of three years become president, it’s because the system is crumbling.”

— With assistance by Samuel Dodge, and Mark Deen

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