These Are The Challenges President Emmanuel Macron Will Face

Macron Elected New French President

Victorious in France’s presidential election, Emmanuel Macron inherits a country with 10 percent unemployment and sluggish economic growth. It’s officially still under emergency rule following a string of terror attacks beginning in 2015. France remains a deeply divided country. In the first round of presidential voting, almost half the electorate supported candidates -- including the National Front’s Marine Le Pen -- who oppose the international trading order championed by Macron, a onetime investment banker with a business-friendly outlook.

1. When does he take over?

Transfers of power in France are faster than in the U.S., where it takes over two months, and slower than in Britain, where it occurs overnight. No date has been set for Macron’s swearing-in, but it must be before May 14, which is Francois Hollande’s last day as president.

2. What does he do until then?

His first step is to name a prime minister, who then must go to work selecting a cabinet. Macron says he already has a candidate in mind, so his announcement could come almost immediately. Macron says he’ll make a quick trip to French troops on an overseas mission, probably in the Sahel, and then will go see German Chancellor Angela Merkel.

3. What is Macron likely to do as president?

There’s a difference between what he’d like to do and what he’ll be able to do, and the key is whether his upstart political party can win a majority in Parliament. His campaign promises included investing 50 billion euros ($55 billion) in new technologies and energy, expanding job training, cutting primary-school class sizes, merging France’s disparate pension systems, using tax breaks to encourage jobs in poor neighborhoods, eliminating an unpopular housing tax, loosening labor laws, cutting payroll taxes, imposing a flat 30 percent tax on capital and refocusing France’s wealth tax solely on property. He says he’ll pay for all that by cutting 60 billion euros through more efficient government. For the European Union, he wants to pursue greater integration and tax harmonization along with stronger anti-dumping measures in EU trade pacts.

4. Can he get all of that done?

Much depends on legislative elections in June. In every instance since 1981, the party that wins the presidency has gone on to win a parliamentary majority. But previous winners all came from one of France’s two major parties. Macron’s En Marche! was created just over a year ago and has no parliamentary history. Many voters cast ballots for Macron mainly to oppose Le Pen. In France, it’s Parliament that passes laws and approves the government. “If Emmanuel Macron wants to be able to govern, he will need a majority in the National Assembly, and it’s far from certain he’ll get one,” said Yves-Marie Cann, head of political studies at Elabe, referring to the lower house of parliament.

5. How could Macron’s party win Parliament?

Most likely it would need to partner up with another party, which would very much shape Macron’s governing agenda. His policies would no doubt look different if he’s forced into a coalition with the Socialists or with the center-right Republicans. There’s been very little polling yet for the legislative elections, and with France’s politics in such turmoil, there’s a good chance of a very messy parliament.

6. Does Macron have a record to build on?

When he worked for Hollande from 2012 to 2016, first as a senior adviser and then economy minister, he consistently pushed the Socialist administration to embrace free-market policies. He called for the end of the 35-hour work week, no more jobs-for-life in the civil service and the elimination of the wealth tax. But as minister, his achievements were limited to letting more stores open on Sundays, making it easier to get a drivers license and allowing inter-city bus travel.

7. Why so little?

Opposition from Hollande’s Socialist camp forced Macron to backtrack on several proposals, such as limiting severance pay and opening up protected professions such as pharmacist and notary. The Socialist Party majority in parliament wasn’t at all open to getting rid of the wealth tax or lengthening the work week. Macron says there is a big difference now: Earlier governments were not elected with a mandate to liberalize, while he now has one.

8. What does Macron’s win mean for the EU and the euro?

It survives, at least for now. For many observers, that was perhaps the most important thing at stake in this election. Le Pen wanted to renegotiate European treaties in a way that would have effectively ended the single currency, the common market and the Schengen border-free zone. That doesn’t mean Macron won’t push for changes. He’s said he wants more joint EU investment projects and less rigid budget-austerity rules imposed by Germany.

9. Does Macron’s win mean the far right has been slain?

Not by any means. Le Pen’s party had its best showing ever in 2017. Counting the far right and the far left, roughly half of the French electorate voted for candidates who wanted to sweep aside the global international order of the past half-century. The concerns that matter to those voters -- immigration, de-industrialization, stagnating wages, Uberization, terrorism -- aren’t going away. Macron himself, in a campaign rally, said the success of his economic agenda will be “essential to prevent the National Front from becoming stronger in five years’ time.”

The Reference Shelf

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE