There is no doubt that the French are a self-sufficient bunch. After all, it was a Frenchman who once wrote, “Hell is other people.”

COVID-19 or not, the French rarely travel abroad for holidays. In terms of food, most French people think they have it best. And at housewarming parties in Paris, the music playlist is usually primarily made up of chansons and French rap classics.

And despite President Emmanuel Macron’s attempts to turn Europe into a global “balancing power,” what happens abroad doesn’t seem to spark much interest at home. The evening news on the public channel on average dedicates 16 percent of its coverage to European and foreign news. By comparison, that proportion rises to 50 percent in Germany. No surprise then that polls show the average French person knows little about the functioning of the EU.

But if this cliché about French aloofness is easily backed up with data points, another common trope about the Gauls doesn’t: that of French arrogance.  At least when it comes to the present, the French are brutally self-critical.

Ruminating

In fact, France seem to be among the least chauvinistic countries in Europe. Asked whether they think their culture is superior to others, 36 percent of the French answered “yes” in a recent poll. This compares to 46 percent in the United Kingdom and 45 percent in Germany.

Or take the COVID-19 crisis: unlike other nations, the Republic’s citoyens won’t rally around the flag. Among Europeans, the French give their government the lowest grades for its handling of the pandemic. Never mind that four of France’s neighbors have significantly higher death-per-capita rates. Never mind either that France’s short-time work benefits are among the most generous, also explaining why consumption is almost back to pre-crisis levels.

Of course, one could explain the French’s dim view of the state’s COVID-19 response as being due to Macron’s unpopularity. But by French standards, the president is actually polling relatively well. At 39 percent, Macron’s approval ratings surpass his predecessors François Hollande (23 percent) and Nicolas Sarkozy (35 percent) at the same point in their terms.

The negative view the French have of their country goes far beyond the complaint du jour. As Macron put it, “We are a country that for decades is divided and in doubt.”

Livre de Plage

Claudia Senik, an economics professor at the Paris School of Economics researching happiness, might have one explanation for why the French are so downbeat about themselves.

Studying cross-national polls, she found that the French have much lower levels of life satisfaction than other countries with similar socio-economic profiles. Senik observed that even when living abroad, French expats are less happy than the local population. This led her to argue that there must be something about France’s cultural “mentality” and education that makes them less happy than their wealth would otherwise suggest.

It’s easy to see where Senik is getting her cues: The French associate intelligence with skepticism. This is still the country that gave birth to René Descartes and existentialism. Today’s best-selling authors are the likes of Virginie Despentes, Michel Houellebecq, and Édouard Louis, who depict contemporary France as a decaying and violent society. More conciliatory books are relegated to the livres de plage category: A distraction to accompany your sunbathing at the beach, but not serious literature.

Finally, there is also a “foul your own nest” premium. Actor Gerard Depardieu insults the French as “a people of idiots” and takes on Russian citizenship. He is only surpassed by comedian Louis de Funès in box office sales. The late rock’n’roll and pop icon Johnny Hallyday moved to Switzerland in the 2000s bashing France’s tax system. Still, the country’s entire political elite joined the roughly 1 million French who flooded the streets of Paris to attend the star’s funeral in 2017. The French love the ones that hate them.

Declinism

Nonetheless, there is more to France’s ruthless self-criticism and declinist tradition than intellectual vanity. Questioned about his negativism, Houellebecq wondered whether he is depressive or the world is depressing.

Indeed, the state of the world has not helped. In geopolitical terms, the former imperial power has long been in decline. And France’s dirigiste economy and society made the country look passé for much of the last 30 years of liberal hegemony.

Add to this the exceptional expectations the French have of their state, and France’s malaise is unsurprising. Frustration is a function of expectations minus reality, psychologists say. The republic’s moto of “Liberty, Equality, Fraternity,” written above every school entrance, is a high bar compared to Germany’s “Unity, Law, and Freedom.”

No wonder the French see their past presidents as a succession of failures. No wonder France has been leading from behind in the OECD’s trust in government indicator for a long time. The paradox, however, is that despite the fact that politics unremittingly disappoints the French, they continue to perceive the state as the solution to each and every single economic and societal problem.

Beyond the Nation State

Another interesting finding from Senik’s research is that foreigners that move to France gradually adopt the locals’ tendency to see the wine glass half empty. It’s been a bit more than two years since I’ve moved to Paris, so please allow me to finish on a slightly optimistic note.

First, the country’s gloomy intellectual establishment is wrong-footed by their compatriots every once in a while. Houellebecq rubbed his eyes in astonishment at Macron’s election in 2017, commenting, “This is the first time I’ve seen positive thinking actually work.”

And second, because of their state-centrism the French sense more strongly the limits of the nation state in today’s world. Europe is no longer just an instrument for French great power status, as Charles de Gaulle viewed it, but a necessity for France to protect its way of life. This explains how Macron managed to get elected not in spite of, but rather thanks to his ambitious EU platform. And this change in the scale of thinking—going beyond the nation state—is what the world needs to confront most major challenges.

And now on to your livre de plage!

The post Pariscope: France’s Sharpest Critics appeared first on Berlin Policy Journal - Blog.

© Claude Cadi

In 1974, the comedy “Les Chinois à Paris” created a minor diplomatic crisis. The plot of the film: Communist China has conquered Europe. France falls without any resistance. Setting up their headquarters in the Galeries Lafayette department store, the Chinese turn Europe into their economic hinterland: Germany is ordered to produce cars, the UK bowler hats, and the Dutch bicycles. The French offer their services as experienced collaborators.

When the movie hit the screens, Beijing’s ambassador to Paris was appalled by the portrayal of China as an imperialist power and threatened “consequences” should the Élysée not ban the film. The left-wing newspaper Libération called for a boycott of the film. Jean-Paul Sartre, Simone de Beauvoir, and other French intellectuals were celebrating Mao’s “cultural revolution” at the time.

The film was meant as an implausible comedy and a parody of France under German occupation; but maybe it was just ahead of its time. With its Belt and Road Initiative (BRI) Beijing is now trying to plug Europe into the Chinese sphere of influence. And the Chinese are quite literally taking control of the Galeries Lafayette; 30 percent of the luxury department store’s revenue is generated by Chinese tourists!

But contrary to the movie’s French submission, France is today at the forefront of Europe’s resistance to China, for two reasons: the geopolitical and the economic.

Paris-Delhi-Canberra

For Paris, Beijing’s hegemonic posture poses a security challenge. 1.6 million French citizens live in the Indo-Pacific. France’s overseas territories in the Indian and Pacific Oceans include huge exclusive economic zones. Paris wants brakes on Chinese expansionism and maritime law to be upheld in the region.

Macron is thus trying to build an “Indo-Pacific axis” between Paris, Delhi, Canberra, and perhaps even Tokyo in order to increase its weight vis-à-vis Beijing. “If we want to be respected as equals by China, we have to organize ourselves,” Macron said in 2018 at an Australian naval base.

Since that speech, France has concluded a strategic partnership with Australia. It also regularly holds “two-plus-two” talks between defense and foreign ministers with Japan to discuss maritime issues in the East and South China Seas. What’s more, the Élysée sends warships to pass through the Taiwan Strait and French submarines patrol around New Caledonia’s coast.

And of course, Macron hopes that establishing France as an “Indo-Pacific power” will yield some further benefits: increased geopolitical importance for France and a rebalancing of Beijing’s European focus from Berlin to Paris. Arms sales in a region that is diversifying away from US suppliers is another objective. Australia has signed a contract for 12 French submarines, India is considering stepping up its order of 36 Rafale fighter jets, Indonesia wants French fighters and submarines and Malaysia French frigates.

Paris-Berlin-Brussels

When it comes to the economy, Paris—unlike Berlin—has seen China’s rise as more of a threat than an opportunity for some time. Yes, the Chinese have become the most important buyers of French luxury goods. But the widening of China’s French trade surplus runs parallel to France’s multi-decade decline as an industrial power.

Moreover, Paris has a tradition of thinking about the economy in strategic terms. Asked whether France will exclude Huawei from France’s 5G network, Macron replied that “I’m just saying we have two European manufacturers: Ericsson and Nokia,“ before adding “this is a sovereign matter,” as it concerns data protection and security issues. In Beijing, Macron stated that the BRI cannot just be “one-way” and that “these roads cannot be those of a new hegemony, transforming those that they cross into vassals.”

Paris has no illusions about its lack of leverage vis-à-vis Beijing. The Élysée thus wants to Europeanize economic relations with China. When President Xi Jinping visited Paris in March 2019, Macron asked Chancellor Angela Merkel and then-European Commission President Jean-Claude Juncker to join their meetings. At the end of the year, Macron invited European trade commissioner Phil Hogan and Germany’s research minister to join him on his trip to China. Addressing a group of French and German business leaders in Beijing, he said: “The more we play the Franco-German and in particular the European card, the more we are credible. The better results we will have.”

Macron thus supports Merkel’s initiative for an investment deal with China. But he doesn’t want to settle for small change. He wants an “ambitious agreement” that provides “full reciprocity.” And he wants to set the right incentives. It was Macron who initiated the idea of an EU-wide foreign investment screening mechanism, which was adopted in 2019. Today, Paris wants to strengthen the EU’s anti-subsidy measures in extra-European trade.

In this context, China is trying to mollify Macron. Huawei promised to build its first European manufacturing site in France. In 2019, Beijing signed an agreement protecting geographical indications of French cheese and wine, a long-standing obsession of French trade diplomacy. Macron is happy to take these tributes but, so far, he hasn’t offered much in return.

Macron, the Realist

The era of French presidents like Charles de Gaulle and Jacques Chirac explicitly welcoming China’s rise hoping it would lead to a more multipolar world order are over. Macron doesn’t want “Les Chinois à Paris” nor does he want them in New Caledonia.

But notably, the Élysée is careful not to join Washington’s anti-China front either. Paris fears that a binary Sino-American competition could provoke a cascading conflict akin to the pre-World War I period. By organizing an alliance of secondary players that is willing to confront China, but with a focus on upholding the multilateral order rather than engaging in great power competition, Macron hopes to change the dynamic.

And yes, Paris has become Beijing’s most assertive partner within the EU, but Macron doesn’t think it is helpful to step on Xi’s toes when there is not much to gain. Since the beginning of his presidency, realist Macron has deprioritized human rights issues in foreign relations. Hence, the silence over Hong Kong. Instead, Macron says things like “I have the greatest respect for President Xi Jinping, and I expect no less on his behalf.” This is ultimately what Macron’s coalition building is about: make Beijing respect France.

The post Pariscope: Macron’s Ententes Cordiales Against China appeared first on Berlin Policy Journal - Blog.

Artwork: Claude Cadi

France has a difficult relationship with capitalism. 69 percent of the French think markets do more harm than good (55 percent in Germany), according to polls. Believing in laissez-faire is considered naive, whether it’s about the economy or raising your kids.

But this does not preclude the country from having an affinity for finance. If you want to talk to a quantitative analyst in New York who creates esoteric financial products, you’ll likely be able to do so in French. And the French have a pragmatic relationship to debt. The average household holds debt worth 121 percent of net disposable income. Before having kids, couples typically get a flat and a 25-year mortgage—a knot much harder to untie than marriage!

So when President Emmanuel Macron proposes issuing European bonds to shoulder the cost of the COVID-19 crisis together, the French don’t worry much. Debt is part of life and contracting it together part of being a community. “Solidarity means common financial means,” French finance minister Bruno Le Maire said outright when detailing his proposal.

Siamo Tutti Italiani

Macron’s insistence on a European debt-instrument is primarily about Italy. Paris is seriously concerned about the economic and political dynamics across the Alps.

Lega’s Matteo Salvini and especially Giorgia Meloni from the post-fascist Brothers of Italy are not so different from Marine Le Pen. Salvini’s and Meloni’s parties together are polling above 40 percent, high enough to give them a parliamentary majority. With the Five Star Movement potentially splitting over whether to use the European Stability Mechanism (ESM), snap elections are not out of the question.

Beyond the short-term, Paris believes the EU’s fate will be decided in Rome, too. Italy, like the rest of Europe, will need to mobilize enormous funds to weather the crisis. But Italy’s debt stands at 135 percent of GDP. So far, the Italian government has only dared to disburse direct fiscal measures worth 1.5 percent of GDP to keep its business and citizens afloat. By comparison, Berlin’s measures amount to more than 4.5 percent of GDP, as research by the Jacques Delors Center shows.

No wonder Milan bankers worry about a wave of insolvencies crashing through the country’s economy. And how could the populists be kept at bay in such a scenario? For Europeans the motto is really “siamo tutti italiani” (“We are all Italians.”), as Le Maire declared. And for Paris in particular. French banks are by far Europe’s largest holders of Italian Treasuries.

Rendezvous with Reality

Even before the current crisis, it was clear to Paris that Europe had to become more of a transfer union—by borrowing together and increasing EU spending. There is simply no way around it in a currency union. That’s why most German economists initially opposed the euro, arguing in a famous 1992 manifesto that it would inevitably necessitate “high transfer payments as part of a fiscal equalization.”

Macron sees no value in moral hazard arguments. Rome has run a primary budget surplus since 2011. Once in the debt trap, no austerity diet can get you out of it. But demanding repentance without the promise of deliverance cannot work in the long-run. France’s moral hazard policy of drowning Germany in debt after World War I backfired. That’s why the allies cancelled Germany’s debt after World War II, Macron recently lectured the Financial Times.

For Paris the feeling is thus that the day where German politics finally has to bend to economic reality has come. In fact, in Macron’s eyes the negotiations are less about whether there will be some form of debt mutualization, but how it is done. Either one holds on to today’s method of the European Central Bank buying Italian Treasuries, or Europeans go for the “clean” and honest alternative: common debt.

Geopolitical Grants

Macron, of course, prefers the second option. There are four reasons why.

First, the current solution undermines the ECB’s monetary independence and comes with legal risks. The ECB’s decision to lift the limit on how many bonds from a eurozone member it can buy will almost certainly be challenged in German courts.

Second, if the ECB does the heavy-lifting, the EU does not get to claim credit for helping Rome. Macron understands that this crisis is also a battle of narratives. That’s why he  gives interviews in the Italian press defending the EU.

Third, European bonds are another facet of Macron’s “sovereign Europe” idea. Having a large euro-denominated sovereign debt market with an abundance of safe assets is a precondition for overcoming Europe’s dollar dependence. European bonds would be a first step toward countering Washington’s habit of weaponizing the dollar to override EU policy, for example on Iran.

And most importantly, only if the money is raised through a European bond can it be given to the worst-hit EU members via grants. Sure, European loans would yield some interest savings for Rome and Madrid. But that won’t be enough. As Macron said after the EU’s leaders videoconference on April 23, whether the EU or the ECB acts as creditor, the loans still end up worsening Italy’s debt-to-GDP ratio. Paris wants outright transfers, may be also for itself. The lockdowns are particularly costly for service-oriented economies such as France.

En Douceur

In order to get what he wants, Macron is dropping the bulldozer approach to EU politics that hasn’t served him well so far. When he came to office, Macron did not lose time to demanded a sizeable budget for the eurozone. He hardly took into account other countries sensibilities in his campaign and ended up with next to nothing: a budget without money.

For once, Macron is not moving alone; he has managed to build an alliance around his cause. It even includes low-debt countries like Luxembourg. This is no longer just a North-South debate.

For once, Macron is framing the problem rather than dictating what he thinks is the best solution, giving Paris more negotiation space. It doesn’t matter whether it is a separate vehicle or the European Commission that issues bonds and hands out grants, as long as it is done, Macron said after the inconclusive EU summit.

And for once, Macron isn’t asking for the impossible. He doesn’t campaign for a move to fiscal union all at once. Instead, he reassures Berlin that the debt-issuance and spending measures should be time-limited.

It appears to be working. Angela Merkel, for the first time, stated she can imagine the European Commission issuing more bonds to finance the recovery. And Merkel told the Bundestag she wants to massively increase the country’s contribution to the EU budget, which serves as the main tool of fiscal transfers within the union. Both would cross traditional German red lines. It is still early days, but Paris is more hopeful than it has been for a while.

The post Pariscope: Macron’s New Europe Tactic appeared first on Berlin Policy Journal - Blog.

“We are at war,” Emmanuel Macron declared on March 16, announcing a nation-wide curfew. As in war, France’s president wants to mobilize the whole nation to achieve one goal: defeating the virus.

Macron even invoked the spirit of the Union Sacrée—the truce of all French political parties after Germany declared war on France in 1914—and suspended the adoption of the pension reform that recently caused the greatest social fracture in decades.

In times of crisis, the French are looking for a strong leader. More than 35 million tuned into Macron’s speech, over half the population of France. The 2018 world cup final of Les Bleusagainst Croatia attracted 26 million viewers. And when Chancellor Angela Merkel addressed the German nation on March 18, 25 million watched.

And the dramatic speech worked for Macron. Polls show that 76 percent found him convincing. Parisians are staying at home in their often tiny apartments. My flat lies in Europe’s second most densely populated neighborhood (52,218 persons per square kilometer). For the first time since moving here I can hear the birds chirping.

War Economy

Macron’s war analogy is shocking at first glance. But it is the right frame of thinking, especially for the economy.

Traditional war economies share three characteristics: First, government spending explodes as the state funds its war effort. Second, the goal of monetary policy becomes the financing of the state. Third, economic policy shifts to the left as governments must project hope of a better future to keep morale high.

In his speech, Macron ticked all three boxes: money should be no object in Europe’s fight against coronavirus. After the European Central Bank presented its first batch of meagre crisis measures on March 12, the Élysée immediately criticized the ostensibly independent central bank saying monetary policy had to go way further.

To the French Macron promises a strengthened welfare state, a more sovereign Europe, and a rethink of globalization at the end of the crisis. “The day after, when we will have prevailed, won’t be like the day before. We will be stronger morally, we will have learned, and I will draw the lessons, all the lessons,” the president said with determination.

Europe-Building

Finally, wars have often served as the catalyst for either nation-building or political disintegration. To stave off collapse, in times of extraordinary stress, heterogenous communities need to learn to trust each other, cooperate outside familiar structures and design new institutions—or fail.

In this context, the president of the Grande Nation made Europe a key theme in his first televised coronavirus address, stressing that this is a common struggle to be faced as “Europeans”—“the virus has no passport,” Macron said. Badly affected regions should be isolated, and it should be Europe’s borders rather than national borders that should be closed. “It is at this level that we have built our freedoms and liberties,” the French president emphasized.

And to get Europe’s war economy going, Macron’s eurozone vision now stands a chance of being realized. In a crisis, the tables turn in favor of integrationists. Saying “no” to any form of fiscal integration doesn’t work anymore for the “frugal” countries if they don’t want to put the currency union in peril. As in the 2010-2014 eurozone banking and sovereign debt crisis, when Berlin had to accept the setup of the EU’s bailout funds. Alongside Rome, Paris now proposes issuing “corona bonds” to coordinate the funding of Europe’s fight against the virus.

Still, so far the coronavirus crisis is yet another example of Macron trying to take European leadership and making bold proposals that lead nowhere because Berlin resists them. Furthermore, Macron is getting caught up in nationalist reflexes.

In her address to the nation last week, Merkel didn’t mention Europe once. When asked during a press conference about fiscal solidarity in the EU, the chancellor was evasive, saying cryptically, “We have to take care that we are now not institutionalizing something that has always been demanded by some.”

And while Macron celebrated the German federal states of Baden-Württemberg and Saarland taking on corona patients from French Alsace, the epicenter of the French Coronavirus crisis, Merkel’s not so subtle social distancing from her neighbors perplexed many in Paris once again. In fact, there is frustration at the level of disinterest in Europe-building.

France First?

That Europe is currently practicing a danse macabre is not all Berlin’s fault. It was Paris that fired the first shot at undermining the EU’s core, the single market. On March 3, Macron announced the requisition of all medical protection equipment in France. This prompted Berlin to ban all exports of medical equipment the next day.

Germany’s health minister, Jens Spahn, said on March 6 that the export ban could be lifted if an EU-wide ban was agreed. His French counterpart defended the requisition the following day, arguing it prevented masks being given to the highest bidder and that Brussels should coordinate the distribution of stocks. However, it took another ten days before Paris and Berlin agreed to drop their export restrictions to fellow EU member states on March 16.

It’s not only future historians who will quibble over who is responsible for this blunder. Austrian Chancellor Sebastian Kurz said pointedly, “We see in Europe that solidarity doesn’t function when push comes to shove. There will be a lot to discuss when this over.”

It’s the Narrative

In today’s Italy, Lega leader Matteo Salvini is successfully pushing his narrative of Europe’s abandonment of Italy. The mask export ban will leave a deep scar in Italy’s collective memory. Italian social media is rife with posts arguing that a statement by the European Central Bank president, Christine Lagarde, to a Handelsblatt journalist that the ECB should not put a tab on Italian government bonds yields is part of a deliberate plan to bring Italy to its knees to benefit Merkel. Italian mainstream papers decry Lagarde’s “anti-Italian attitude” and eagerness to please Berlin.

The health crisis has already morphed into an economic crisis. To prevent it from becoming a European political crisis, Merkel and Macron must suppress their nationalist instincts and express their joint commitment to the currency union, the single market and those EU members like Italy with less fiscal leeway to fight the virus. Italians needs to hear this, so that Europe stands a chance of regaining their trust.

The post Pariscope: Imagine Macron Declares War and No One Shows Up appeared first on Berlin Policy Journal - Blog.

Artwork © Claude Cadi

What do German Financial Times columnist Wolfgang Münchau, French sociologist Didier Eribon, and Brexiteer-in-chief Nigel Farage have in common? They all think France is ripe for a takeover by the far-right Marine Le Pen.

The argument: Emmanuel Macron has failed on all counts. The French president has gotten nowhere with his plans for EU reform. His domestic policy agenda has divided the country. In a run-off with Le Pen, left-wingers will stay at home. We’ve seen it in the United States and Italy: centrist reformers pave the way for populists. the 2022 French presidential vote could be the shock election continental Europe has not yet had.

Whether this scenario plays out or not, how you think about tomorrow influences how you act today. Parisians joke about how a Le Pen win could provoke a welcome correction to the capital’s overheated housing market. Politicians in Berlin say they are hesitant on eurozone integration because faith in protest-ridden France is low. What happens to the EU if the notoriously “pas content” French vote Le Pen into the Élysée?

Election Time

France is entering its next election cycle. Municipal elections are coming up in March. Macron’s La République En Marche (LREM) is certain to perform badly. The upstart party isn’t even fielding candidates in many of France’s 34,839 municipalities. Moreover, in Paris, LREM is facing the difficult task of trying to replace the popular outgoing mayor Anne Hidalgo, a socialist rumored to be eyeing a bid the Élysée. To make things worse, the LREM mayoral contender Benjamin Griveaux stepped down just weeks before the elections because of a sex video scandal; his replacement, Minister of Health Agnès Buzyn, faces an uphill struggle, to say the least. In the spring of 2021, regional elections will follow. Here, LREM will try to coopt or defeat the remaining heavyweights from the center-right Les Républicains who could challenge Macron in 2022.

In the dynastic Rassemblement National (RN), the rebranded Front National, Le Pen has already announced she will run for the presidency for a third time. With her niece waiting in the wings, this might be her last shot. Le Pen has been crisscrossing la douce France, trying to soften her image. No more talk of exiting the euro. No mention of her confidante Axel Loustau, who practices the Nazi salute. Instead, Le Pen now wants to change the EU from within and has commemorated the liberation of the Auschwitz concentration camp 75 years ago.

In this election context, the Élysée is shifting from policy to politics. Macron has delivered the key policies of his 2017 campaign program: reforms of the labor market, unemployment insurance, taxation, and now pensions. In France, change rarely comes without a street fight. But after three years of social conflict, the country that celebrates the revolutionary myth like no other is desperate for some peace.

And Macron himself needs things to calm down so that his reforms can unfold to their full potential. Over the next two years, Macron will try to sit tight at home, conduct foreign policy, and focus on his campaign.

Unholy Alliance

Macron is starting from a passable, though not great, position to try and become the first reelected president since the late Jacques Chirac. His approval ratings (34 percent) are much higher than François Hollande’s (17 percent), but a bit lower than Nicolas Sarkozy’s (37 percent) at similar points in their presidential terms.

Just like Sarkozy, Macron is passionately hated by many. For fervent left-wingers and the far-right, the former Rothschild banker who told an unemployed man that he could easily find a job by “crossing the street” is a neo-liberal capitalist. Both groups also agree that Macron is Angela Merkel’s lackey.

At the end of the TV debate ahead of the second round of the 2017 elections, Le Pen said: “France will be governed by a woman from Sunday: it is either me or Ms Merkel—that’s the reality.” In a speech in parliament after the 2017 elections, left-wing nationalist Jean-Luc Mélenchon exclaimed: “We haven’t voted for Merkel!”

“In politics, shared hatreds are almost always the basis of friendships,” Alexis de Tocqueville said. Indeed, Mélenchon finds increasingly kind words for Le Pen. The France Insoumise (FI) leader labels Merkel as “anti-humanist,” but congratulates Le Pen for “progressing toward humanism” and joining the pension reform protests.

In the first round of the 2017 presidential elections Le Pen got 21.3 percent of the vote, Mélenchon 19.6 percent, and Gaullist euroskeptic Nicolas Dupont-Aignan 4.7 percent. So are Münchau, Éribon and Farage right? Is that the basis on which the self-declared “common-sense politician” Le Pen will accede to the Élysée this time?

Macron‘s Track Record

This narrative has a major problem. In 2017, all the conditions were in place for a Le Pen win. The economy was growing at a snail’s pace, the 2015 terror attacks had traumatized the country, and the refugee crisis—coupled with Michel Houllebecq’s novel Soumission—had fueled an absurd narrative of a “Muslim takeover” across the country. But despite this, Le Pen got only 33.9 percent of the vote in the second round.

Absent a major crisis, Macron will be the first president since Chirac to stand for reelection with a positive economic track record. France’s investment-to-GDP ratio has surpassed Germany’s. Hiring a minimum-wage worker in France is now cheaper than in Germany. Unemployment has dropped from 9.3 percent to 7.9 percent since Macron took over and is continuing in this direction. Tax cuts are boosting spending power, and ultra-low interest rates allow the Élysée to continue running fiscal deficits. Macron learned from Obama and former Italian Prime Minister Matteo Renzi that sticking to fiscal responsibility in the face of populists is self-defeating.

While having a decent economy is not enough to counter the far-right—if it were, right-wing populists in Switzerland wouldn’t get 26 percent of the vote—it certainly helps. Meanwhile, on the issue of migration, Macron is difficult to attack as he follows a hardline policy himself.

Moreover, the RN has struggled to build momentum, despite the Yellow Vests protest movement. Last year’s European election was a disappointment. The party lost 1.5 percentage points compared to 2015 and more than halved its share among French voters under 35, despite having installed the charismatic 23-year-old Jordan Bardella as its lead candidate.

A Beneficial Narrative

Lastly, France’s political landscape is evolving. A standoff between Macron and Le Pen is not a foregone conclusion. At the European elections, the Greens (13.5 percent) clearly outperformed the far-left FI (6.3 percent). Mélenchon has been drifting toward irrelevance, in large part because of his flirtation with the far-right.

It is the Greens that have caught the tailwind of the Greta-wave and are in the running to win some important cities for the first time, such as northern Rouen and southern Montpellier. In 2022, the dominant force on the left is likely to be Green and pro-European. Not the nationalist Mélenchon. This is a problem for Macron who has delivered little on his “Make the Planet Great Again” pledge.

Talking up the likelihood of a Le Pen victory in 2022 is a beneficial narrative for many. For the radical left, it supports the argument that the EU needs to become more than a “neoliberal project.” For Germans, it provides a good excuse to hold back on EU integration. For Brexiteers, it vindicates their decision to leave. And for Macron, this discourse allows him to portray himself as the only alternative to Le Pen and to sideline the Greens.

But like the gloomy picture of a collapse of the EU—which Münchau and Farage are also equally apt to evoke—the specter of Le Pen in the Élysée is unlikely to materialize anytime soon.

The post Pariscope: The Useful Le Pen Threat appeared first on Berlin Policy Journal - Blog.

In July 2017, barely two months after taking office, Emmanuel Macron made Libya his first foreign policy initiative. The French president leveraged his image as Europe’s political superstar to orchestrate a meeting between the Libyan Prime Minister Fayez al-Sarraj and renegade military leader Khalifa Haftar.

Looking back at Macron’s first attempt at ending Libya’s civil war is illuminating, not least because it illustrates three key tenants of Macron’s foreign policy vision.

The Macron Doctrine

First, France’s president believes you cannot shape reality if you don’t recognize the facts on the ground. Whether you like it or not, General Haftar was in control of most of the country’s east and south in 2017. To stabilize the country, Macron was convinced that it was no use ignoring these realities; one had to talk to Haftar.

Macron believes that France is destined to be the player that can speak to all sides. Yes, the country is a member of the European Union and NATO. But, as Macron outlined in a 2019 speech addressing his assembled ambassadors, he sees France’s role as a global “balancing power” with an independent voice.

Second, Macron prioritizes security over other issues. In summer 2017, the so-called Islamic State had just been driven out of central Libya. Sarraj dominated Tripoli and Libya’s western coastline, which is key to controlling migration across the Mediterranean. Italy and Germany were thus primarily interested in collaborating with al-Sarraj’s UN-backed government.

For Paris however, the main concern remained fighting terrorism and keeping pressure on the fundamentalist militias active in the Sahel. Since 2014, France has deployed up to 4,500 troops from Mauritania to Chad to stabilize the region. Macron’s predecessor, the former president François Hollande, had already banked on Haftar not allowing Islamist militias active in Chad and Niger to use southern Libya as a safe haven.

Third, according to Macron, action is always better than passivity. If you don’t act and get involved, others will decide for you. In his view, France must get engaged in Libya if it wants to prevent resurgent Russia or neo-imperial Turkey from calling the shots. Sovereignty-obsessed Macron hates to be someone else’s hostage.

Fool Me Once

All of these considerations led Macron to invite Haftar to Paris in July 2017, thereby elevating the erstwhile Gaddafi ally to Sarraj’s equal. At first sight, the meeting looked like a success. A ceasefire was agreed and the two opponents even vowed to hold national elections.

In reality, the initiative turned out to be a complete failure. In hindsight, it illustrates a pattern of foreign policy mistakes that the otherwise adaptive French president keeps repeating.

As with the embrace of Vladimir Putin’s Russia, opening the door to an international pariah can help put France at the center of the geopolitical attention for a moment. But it doesn’t necessarily yield meaningful results. Offering Haftar the international recognition he was longing for, Macron may have in fact emboldened the military man to take the battle to Tripoli in an attempt to become Libya’s ruler.

Moreover, Macron’s Libyan summit wasn’t coordinated with Rome or Brussels, and none of the regional powers involved in the conflict were present. Macron is prone to the notion that he can do everything on his own. At home this has worked to some extent. On the international stage his unilateral approach is doomed to fail.

Lastly, for Haftar, as for Putin, shaking hands with Macron was a free lunch. But for the French president, his overture cost him a lot of good will and trust in Europe. Italy had a long-standing Libya policy of supporting al-Sarraj. By officially courting Haftar, Macron managed to speedily turn Rome against him. Hosting Putin and calling for Europe to reach out to Russia had the same effect with Poland.

Doubling Down

Of course, Macron wouldn’t be sitting in the Élysée today if he was discouraged easily. In April 2019, 76-year-old Haftar marched on Tripoli in an attempt to overthrow the al-Sarraj government. With Egypt and the United Arab Emirates—both French strategic allies and important arms purchasers—and even Russia supporting Haftar, what could go wrong? Did Macron want to force a decision?

Rogue military strongman Haftar most likely did not ask Cairo, Abu Dhabi, Moscow, or Paris for permission. Nonetheless, Haftar’s troops were found to be in possession of French arms and Paris blocked an EU statement condemning the Tripoli offensive. In a TV interview following last year’s G7 meeting in Biarritz, Macron came close to acknowledging France’s involvement in Libya.

But the offensive stalled. And by siding with Haftar, Macron has lost his posture as an honest broker, leaving German Chancellor Angela Merkel to have her own go at a Libya peace conference. This might also turn out to be the case regarding Russia. If Moscow and Brussels ever do move toward closer cooperation, Macron won’t be brokering the deal: Europe’s Russia-skeptics simply don’t trust him.

Jouer Sur Deux Tableaux

For the family picture at the January Libya conference in Berlin, Merkel and Macron stood side by side in the center, giving the impression they were in agreement and in charge—which couldn’t have been more misleading.

Germany calls upon everyone to be reasonable, but has no idea how to bring about peace or even a ceasefire. In the classic tradition of French diplomacy, Paris, meanwhile, is hedging: while officially supporting a political solution, France continues to give Haftar diplomatic support. Most recently by accusing Turkey of sending further Syrian troops to Tripoli and violating the arms embargo agreed in Berlin.

Libya has become an illustration of not only Macron’s, but also Europe’s foreign policy malaise. France’s key concern is security, while Germany tends to focus on single policy issues such as migration. Paris wants a seat at the geopolitical bargaining table. Berlin instead is happy to take on a Swiss-style role of conference hotelier.

The tragedy is, as the Libyan case illustrates, that as long France and Germany fail to combine their forces, neither will succeed—or even matter.

The post Pariscope: Libya, a Case Study in Missteps appeared first on Berlin Policy Journal - Blog.

Artwork: Claude Cadi

The process of European integration has reached a critical point.” 25 years ago, this sentence set the stage for the famous Schäuble-Lamers memorandum and its bold vision for Europe.

The always humble foreign affairs expert Karl Lamers and the notorious Wolfgang Schäuble, both members of Germany’s Christian Democrats (CDU), warned that a “regressive nationalism” was taking hold in Europe, feeding fears of unemployment, migration, and societal change. Single countries could not tackle these problems—national sovereignty had become “an empty shell.” Indeed, only through the European Union could the continent’s nation-states be sovereign at all.

At the same time, enlargement would make the union more diverse and lead to a “significant power gain” for Germany. It would also overstretch the EU’s institutions and render it less effective. The EU was thus at risk of degenerating “into a loose formation essentially focused on economic aspects.”

But “such an ‘enhanced’ free trade area could not cope with the existential problems of European societies and their external challenges,” the two men from Baden-Württemberg argued. To secure France’s backing for enlargement and get the EU institutions ready, Bonn should propose new measures for “a strong, capable and integrated Europe.”

État-Nation vs. Europe

Their idea: the EU’s founding members (except Italy!) should pursue political union on their own and form a “core Europe” with a common migration and social policy, coordinated budget policies, and strong defense and foreign policy capacities. Building this core Europe should “reconcile two a priori contradictory goals—deepening and enlargement,” Schäuble and Lamers wrote.

The proposition got almost no traction in France. As Berlin is today, Paris in 1994 was in a state of paralysis. François Mitterrand’s presidency had entered its last year, and the socialist in the Élysée had to share power with a center-right government. And while EU flags then as now fly next to the Tricolore above every school entrance in France, Paris is, when push comes to shove, often more than hesitant to give up sovereignty for Europe’s sake. France is after all the literal État-nation, where the state created the nation and still embodies it.

The clear-sighted Schäuble and Lamers anticipated this, writing in the 1994 paper that “when German propositions are unequivocally presented, then France must also decide clearly. It has to rebut the impression that although it does not allow others to doubt its fundamental will to Europe’s unification, it time and again hesitates on concrete integration steps.”

Joschka Fischer’s Avant-garde

At the turn of millennium, Foreign Minister Joschka Fischer revived Schäuble’s “core Europe” idea. In a speech at the Humboldt University, Fischer argued a group of EU countries should form “the avant-garde, the driving force for the completion of political integration.”

This time, Paris at least replied. Addressing the Bundestag, President Jacques Chirac called for a “group of pioneers” to cooperate more closely on economic and defense policy. But for the Gaullist, “pioneers” was code for a more inter-governmental mode of cooperation that would boost France’s leverage. A “European super-state” was not the goal, Chirac said. Paris was beaming with self-confidence at the time, as France experienced a brief economic boom.

Fischer did not get far with his proposal. At the 2000 Nice summit, Berlin and Paris preferred to fight over their respective voting rights within EU bodies. The French “No” to the EU constitution in 2005 did not help either. And once Eastern enlargement was a reality, Angela Merkel ditched the “core Europe” idea for good, arguing the new EU members shouldn’t be pushed to the periphery again.

Not Just a Market

This is all history of course. But there is one person who has studied it well: Emmanuel Macron. Before entering the Élysée, he had his shot at a Humboldt speech in January 2017, outlining his vision for Europe. Citing the Schäuble-Lamers memorandum and Fischer, he apologized that France had not taken up their initiatives and promised to continue their fight.

Macron has certainly kept his word and the overlap between his ideas and those of Schäuble and Lamers is indeed astonishing. Europe’s biggest mistake in the last decade “was to abandon this word: sovereignty,” Macron says. He doesn’t stop exclaiming “Europe is not a big loose market!,” but a political union giving citizens a sense of control in a globalized world.

And as Schäuble did in 1994, Macron believes creating this “sovereign” EU necessitates, first, that enlargement be linked to institutional reform. “Let’s be honest … the system of consensus at 27 doesn’t work. … The ones who want enlargement must also accept more qualified majority voting,” Macron told the press at the London NATO summit in December 2019. And, second, that the EU’s willing members need to move forward on their own, regardless of the others.

Full Circle

That Wolfgang Schäuble, now the president of the German Bundestag, endorsed Macron’s European initiative on December 5 in a speech at … yes, the Humboldt University, is thus nothing but consequential.

Schäuble said Macron’s “Europe that protects” slogan is the right formula. The EU needs to reimpose the primacy of politics in a globalized world. And in a sideswipe against Merkel, he added, “The French president is impatient—who could not forgive him? It is the result of too much waiting—for our answer, German ideas, and common leadership.”

Schäuble citing Macron who cites Schäuble relaunched his “core Europe” idea, arguing that “we cannot afford that the most hesitant, the slowest EU member determines the tempo.” Schäuble called for a “Google tax,” the protection of Europe’s data from the United States and China, the investment of Germany’s trade surplus in climate change measures abroad, more qualified majority voting in European foreign policy, and—chiefly—for Berlin to get serious about EU defense.

The security focus is not only a reaction to NATO’s “problems,” as Schäuble, a committed transatlanticist, put it in his speech. Instead, he sees security as “the inner core of sovereignty,” adding that “knowing about one’s own sovereignty is key to defining a people’s relationship to itself and each other.” Therefore, Schäuble argues that developing Europe’s “capacity to defend itself is an essential factor for the stabilization of an EU identity.”

Schäuble Support

In Schäuble’s thinking, the project of an EU army could bring Europe’s east and west together. And like Macron, Schäuble pleaded for reconsidering the EU’s relationship with Russia, while acknowledging that Germany’s commitment to Nord Stream 2 puts it in a bad position to reassure eastern Europeans.

All of this is strong stuff in Germany, and not yet wildly discussed. But as the Bundestag president says, the country needs this “unpopular debate.” Schäuble can certainly count on Paris not to let go.

The post Pariscope: The Macron-Schäuble Axis appeared first on Berlin Policy Journal - Blog.

Artwork © Claude Cadi

Emmanuel Macron is a trained philosopher. In a country, in which appearing cultured is the status currency, he never misses a chance to spice up his speeches with some thoughts from the wise and often dead.

Among Macron’s favorites is the enlightenment thinker Immanuel Kant. The man from Kaliningrad famously argued that lying was never justified, as it undermines your interlocutors’ dignity and prevents them from taking rational decisions. This is Macron’s standard line of defense for the rhetorical bombs he likes to throw every now and then.

Arguing the 35-hour workweek is a mistake, qualifying the demographics of the African continent as a “bombshell,” or declaring NATO “brain dead” in an interview with The Economist, Macron likes to provoke public outcries at home and abroad and justifies himself in always the same way: “I am being honest with the French,” “I am saying the things as they are,” or “It is no sign of contempt to tell the truth.”

Battle of Ideas

But eager beaver Macron is certainly not only sharing his thoughts on NATO’s health condition out of a Kantian ideal and to enable his EU partners to take fully-informed decisions. He also believes speaking the “truth”—and doing it publicly—yields political spoils.

This is where another philosopher Macron likes to quote comes in. Antonio Gramsci reasoned that ideological victory precedes political victory. To persistently tell the “truth” and force society to think in your terms is thus the real revolutionary act, the Marxist argued.

For Gramsci, who is also en vogue with today’s right-wing populists, “Ideas and opinions are not spontaneously born in each individual brain: they have had a center of formation, or irradiation, of dissemination, of persuasion—a group of men, or even a single individual, which has developed and presented them in the political form of current reality.”

The French President certainly sees himself as this Gramscian hero. The “brain dead” statement in conjunction with his calls for Europe to relearn “the grammar of sovereignty” and “rearm mentally,” served as a “wake-up call” Macron said in a press conference with NATO Secretary-General Jens Stoltenberg. In the Economist interview, Macron also questioned whether Article 5 of the NATO treaty, which commits members of the alliance to collective defense, was still valid.

Trump Support

If the goal was, first, to make it impossible for him to be ignored, second, to force Europe to debate his ideas of a “sovereign EU” and partnership with Russia, which, third,  should help disseminate his views and, fourth, pave the way for policy change down the line, Macron can certainly declare “mission accomplished” on the first two counts.

Politicos in the Twittersphere have been all over the “brain dead” comments. Other EU leaders reacted fiercely and even the normally calm Chancellor Angela Merkel has shown her frustration.

And indeed, saying that NATO is “alive and kicking” with a straight-face has become somewhat of a challenge. One tweet by U.S. President Donald Trump telling off Macron would have sufficed to scotch the debate for good. But Trump has remained silent so far and prefers to continue poking at Germany.

Even worse, three days after the Economist interview, Macron boasted on Twitter about the “many convergences” and the “excellent phone conversation with Donald Trump on Syria, Iran and NATO.” The two also agreed to meet ahead of the NATO summit in London on December 4. Paris is keen to point out that Trump, who described NATO as “obsolete” before he took office (he later withdrew the comment), is on the same page as Macron.

Limits of Truth

Still Macron’s gamble poses problems and many in the Paris administration feel uncomfortable with his grand strategizing.

First, telling “the truth” can do damage. If a murderer rings at your door and asks where your friend is who he wants to kill, should you lie? Kant argued No, taking his position to its (absurd) extreme. But by questioning NATO’s Article 5 and reaching out to Russia, the EU’s eastern members feel Macron is doing just that.

Second, changing the way Europeans think about security and Russia will—if at all possible—take time. Indeed, an overlooked element in Macron’s interview is that he sketches out a five to ten-year horizon: “Things won’t happen overnight. But once again, I am opening a track that I don’t think will yield results in 18 or 24 months. … If I don’t take this path, it will never open up.”

Lastly, by claiming to speak in the name of “truth,” Macron implicitly says his adversaries are at best stupid or at worst liars. Macron’s interventions spur debates, a precondition for bringing Europeans closer, according to Jürgen Habermas, another of Macron’s favorite philosophers. But his bulldozer mentality and refusal to listen to others also creates bad blood. The Yellow Vests taking to the streets and the European Parliament rejecting Sylvie Goulard’s candidature for the EU Commission certainly had one thing in common: frustration with Macron’s self-righteous attitude and stubbornness.

No End in Sight

Nevertheless, Macron believes that France has more to lose than others if a real debate over his “sovereign Europe” dream keeps being suffocated. He thus continues to double down, following the motto of Facebook-founder Mark Zuckerberg’s “move fast and break things.”

In the press conference with Stoltenberg, Macron said “Is our enemy today Russia? Or China? … I don’t believe so,” and suggested NATO should essentially be reduced to an anti-terror alliance. He also demanded more help from allies in the Sahel adding in a grave tone: “If some want to see what they call cost-sharing, they can come to the ceremony on Monday that France organizes (for the 13 soldiers killed in a helicopter collision in Mali).”

Attempts to out-maneuver Macron, for example by setting up an “expert group” to study NATO strategy, as German Foreign Minister Heiko Maas proposed, don’t seem to work. If Berlin wants to calm spirits and regain some control over the new debate on European security,  including enlargement, Germany must find an understanding with Macron. 

The post Pariscope: Macron’s Obsession with Truth appeared first on Berlin Policy Journal - Blog.

Artwork © Claude Cadi

On paper, France and Italy seem like lovers destined for each other. The “sister republics” are each other’s second biggest trading partner, and perhaps more importantly, they have a natural cultural affinity. It doesn’t need an equivalent to the Franco-German TV channel Arte for Italy and France to become their film industries’s respective biggest foreign audiences.

Still, the EU’s two largest Latin countries have rarely formed a power couple. After World War II, France’s political elite did not trust post-fascist Italy and wanted the Italians kept out of NATO. In the 1960s, Charles de Gaulle felt offended when Rome did not follow his lead but rather welcomed American military bases and supported a supranational Europe instead of his vision of a “Europe des États.”

It didn’t help that the French and Italian left cultivated close ties in the 1980s and François Mitterrand gave asylum to members of the terrorist Brigate Rosse. And in 2000s, at the height of the Iraq crisis, Jacques Chirac snubbed then Prime Minister Silvio Berlusconi, telling him, “One doesn’t export democracy with an armored car.” In France, the one-liner is part of every Chirac Greatest Hits album. But this did not prevent his successor Nicolas Sarkozy from ousting Libyan dictator Muammar Gaddafi in 2011—against Rome’s express protests.

Stand-Off

If recent European history is full of Franco-Italian skirmishes, the recent years under Emmanuel Macron have been no exception. Long before the Five Star Movement and the far-right Lega acceded to power in June 2018, Macron repeated France’s classic mistake of taking Italy’s support for granted or simply not caring about antagonizing Rome.

Once in the Elysée, Macron barred rescue vessels carrying migrants from docking in French ports and decided to maintain checks on the Italian border, which left asylum seekers stranded at Ventimiglia. Macron also did not hesitate to block an Italian takeover of a French ship-building yard and undermine Italy’s long-standing Libya policy.

Rome supports the UN-recognized government in Tripoli. It dominates Libya’s west, which is key to controlling migration across the Mediterranean. Macron’s primary Libyan concern, however, was to secure the Sahel region. This led Paris to throw its weight behind Khalifa Haftar. The general, once an exile in the United States, vowed to go after Islamic terrorists and even seems to have received French arms to that purpose. But Haftar used them to march on Tripoli in the spring of 2019 in an attempt to overthrow the government.

While across the Rhine, the French president is seen as a great European, the Italians discovered Macron’s Gaullist and unilateralist side early on. In Italy, anti-French rhetoric has come to replace anti-German sentiment.

“A Chance to Be Seized”

It is only now that Macron seems to have finally understood that Italy—more than any other country—is the decisive battleground for the EU’s future.

There is of course the economic question. Italy’s 132 percent debt-to-GDP ratio is the bomb that could blow up the currency union—and French companies are Italy’s largest foreign investors. But in a world of ultra-low interest rates, the debt elephant in the room can be ignored for a while.

The real problem is political. The specter of a far-right prime minister taking over in Rome has focused minds in Paris. Lega leader Matteo Salvini would not only have frustrated most of Macron’s plans in Brussels. Perhaps more crucially, the Italian far-right ditching coalition partners and rising to power on its own would have allowed Marine Le Pen’s Rassemblement National to lose its stigma of unelectability, which is what got Macron into the Elysée in the first place.

That Salvini locked himself out of power this summer is, in this context, seen as a godsend that comes with responsibility. As French Finance Minister Bruno Le Maire said, “We believe having a new Italian government is a chance, and chances have to be seized”.

The Elysée is keen to make sure the Italians regain confidence in the EU. The French president was the first head of state to pay a visit to Giuseppe Conte’s second government, formed by M5S and Italy’s Social Democrats (PD) in September. Paris is lobbying Brussels to allow Conte some fiscal breathing space. On Libya, Macron has let Berlin take over to try to mediate a solution as Paris has lost its pretense of neutrality.

Paris is also the main force behind a renewed push for a mechanism distributing incoming asylum-seekers across the EU—an old Italian demand. This is not completely without self-interest on Macron’s part. France is recording rising numbers of asylum-seekers. Those rejected by other EU countries come to France hoping for better treatment. Macron realizes that shutting the border with Italy doesn’t solve the problem.

No Time for Renzi

Lastly, Macron has stopped playing  domestic politics in Italy. In parallel to the government of the day in Rome, Macron had entertained a relationship with Matteo Renzi, the former PD leader. Macron even flirted with the idea of allying with Renzi in the European elections. He was a constant factor of insecurity in Italy’s political landscape.

Last month, Renzi exited the PD to found his break-away Italia Viva party. Importantly, Macron chose not to meet Renzi when he jetted to Rome. Italy’s government is notoriously unstable. But the Elysée has no interest in Renzi breaking away from Conte’s second government and provoking snap elections—at least not before Macron faces his own rendezvous with the French electorate in 2022.

Europe is slowly realizing that Conte must be helped if Salvini is to be kept out of power. In this context, a Franco-Italian allaince may finally become a viable force in Brussels.

The post Pariscope: The Italian Job appeared first on Berlin Policy Journal - Blog.

Artwork © Claude Cadi

Emmanuel Macron is not known for selling himself short. At the moment he is openly relishing having won the EU top jobs game—the French President has dealt himself a promising hand for future poker rounds in Brussels.

In fact, this is not just a good hand but a royal flush.

The king card is Ursula von der Leyen. The President-elect of the European Commission is a proven pro-European who knows she owes her promotion to the Elysée Palace. The queen is Margrethe Vestager. The “US giant slayer” sits atop the competition portfolio and will keep up the pressure on monopolistic internet giants and corporations seeking undue tax advantages.

Paolo Gentiloni is the jack. The Italian is set for the economic policy portfolio and will supervise the application of the EU’s fiscal rules. This is crucial for France because at the height of the Yellow Vests protests, Macron boosted spending and dropped his goal of achieving a balanced budget by the end of his term in 2022. He can count on Gentiloni to show him some leniency here.

The ace is Sylvie Goulard. As internal market commissioner, Macron’s close ally will drive the EU’s industrial strategy offensive and regulate the digital economy. Moreover, she will also oversee the implementation of the European Defense Fund. So far, the fund is Macron’s only EU success with a potentially significant fiscal dimension. France’s aerospace and defense industry hopes to benefit. In Paris, there is a sense of awe at how Macron managed to include both the single market and defense in the Frenchwoman’s portfolio.

The French Influence

Taking a closer look at the mission letters von der Leyen sent to her commissioner candidates makes Macron’s influence appear even greater.

Take climate policy. Raising the targets for greenhouse gas emission reductions, boosting Green spending, turning the European Investment Bank into a climate bank, introducing a EU carbon border tariff—the new commission’s agenda reads like a carbon copy of La République En Marche’s European election manifesto.

Moreover, von der Leyen’s policy program includes a series of French evergreens, such as a eurozone budget and an EU-wide tax for the likes of Google. She has ordered a strengthening of the EU’s trade defense measures and will insist on reciprocity when it comes to opening up Europe’s public procurement markets. The former German labor minister also vows to introduce a common minimum wage framework that could lead, à terme, to an EU-wide unemployment (re-)insurance scheme.

Work To Do in the Council

While the French President has clearly won the battle over the Commission’s future policy priorities, it may still turn out to be a hollow victory. Macron remains the only European head of state that has articulated a comprehensive vision for the EU in a series of speeches. That the notoriously pro-integrationist European Parliament and Brussels machinery are closely aligned with his vision of a “European Renaissance” is no surprise.

But to get any of his landmark projects over the line, Macron ultimately needs his counterparts in the European Council on board. So far, most leaders have preferred to let Macron speak and enjoy the limelight, rather than take the stage themselves and truly engage with him. Some of them have reservations about Macron’s ambitions.

Paris does hope, however, that the tide is turning. The political and the macroeconomic picture—above all in Germany—has changed and is opening avenues to French ideas.

First, climate change has risen to become the preeminent theme. For Angela Merkel’s CDU/CSU and the SPD, the centrist parties governing in Berlin, the Green surge has become the primary electoral concern. However, addressing climate change ultimately requires greater state involvement in the economy and investment. For the German government, it is becoming increasingly difficult to justify clinging to the Schwarze Null. To use late President Jacques Chirac’s metaphor: When the house is burning, firefighters don’t worry about running up the water bill. Paris follows the German debate about deficit spending with great attention. It has not gone unnoticed that some SPD leadership candidates and now even former CDU finance minister Wolfgang Schäuble are proposing to revise the debt brake.

Second, Germany is about to enter a recession. This is no good news for France, which exports more goods across the Rhine than to anywhere else. But it nourishes hopes in Paris that the slowdown might prompt Berlin to reconsider some of its traditional policy stances.

After years of resistance, German banks and the finance ministry are warming to the idea of Europeanizing the hitherto national bank deposit insurance schemes. With the country’s two largest banks in a fragile state, completing the banking union could play also to Germany’s advantage. Moreover, the reform would open the possibility of a European merger for Deutsche Bank or Commerzbank. Berlin prefers this to the idea of an American takeover.

Finally, Macron has another ace up his sleeve: Christine Lagarde. She guarantees a continuation of the European Central Bank’s ultra-lax monetary policy. As long as the eurozone’s fiscally conservative countries do not change course, Paris can at least rely on record-low interest rates and run profit-yielding deficits.

Playing the Cards Right

In 1986, the need to revive growth and the (neo-)liberal wave provided fertile ground in which the EU leaders could pass the Single European Act. It represented a giant leap of integration, truly transforming the union into one single market as discussed by the Austrian economist Friedrich Hayek in a remarkable 1937 essay.

Today, with Europe once again looking for growth, the climate imperative may provide the springboard for the EU to take another leap forward. And this time in a fashion more closely aligned to France’s economic philosophy—one that favors investment over savings and a voluntarist over the night-watchman or ordoliberal state.

Above the Elysée, the stars seem to be aligning. A pro-EU government is back in power in Rome. Budapest and Warsaw are isolated, and their economies still very much depend on EU fiscal transfers. Macron wants to move fast. But in poker, when you have good cards, you maximize your win by slightly understating your hand. Macron has reason to be grinning again, but he should also practice his poker face.

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