The Pandemic Depression
The Global Economy Will Never Be the Same
Last October, at the beginning of Emmanuel Macron’s seemingly quixotic quest for the French presidency, Le Monde reported that the French, although always the pessimists, were in a terrible funk. Few had any confidence in the solutions that the political candidates were putting forward on the campaign trail, and many feared that France was about to succumb to the same furies that had led British citizens to turn their backs on the European Union and American voters to elect Donald Trump. They agonized over the possibility that Marine Le Pen, the leader of the far-right populist National Front, might become the president of the Fifth Republic—or, at the least, grow more influential than ever before.
Eight months later, the mood of the country has been utterly transformed. After Macron won the presidency, defeating Le Pen, his budding political movement, En Marche!, now renamed La République en Marche (Republic on the Move), went on to secure an unprecedented landslide victory in the first round of legislative elections last week. According to estimates from the second and final round of votes on Sunday, La République en March and its ally, the centrist Democratic Movement party, won 361 out of 577 seats—slightly lower than the crushing 400-plus majority that they had been slated to win. But it was still a major success for a party that had not existed just over a year ago. Meanwhile, the two parties that had dominated French politics for the past half century, the Socialists and the Republicans, along with their coalition partners, were reduced to shadows of the mighty political machines they once represented, with the Republicans holding on to 126 seats and the Socialists to a mere 46. A wing led by La France Insoumise, the far-left insurgency led by Jean-Luc Mélenchon, won only 26 seats, far too few to pose much of an obstacle to the new government. And the National Front, which had consoled its loss in the presidential race with hopes of becoming the main opposition party, obtained eight seats.
This late-cresting wave of enthusiasm for the youthful president has given the Fifth Republic, which many had thought to be in its death throes, a new lease on life. The regime’s institutions, tailored by its founder, Charles de Gaulle, were designed with a powerful president in mind. When led by the president’s political party, the legislature is effectively the president’s to run, ratifying his vision rather than checking and balancing his extensive powers. Although the French frequently express discomfort with the monarchical and Bonapartist vestiges of the presidency, they also chafe when their leader fails to fully inhabit the powers he is offered. Macron’s predecessor, François Hollande, is a case in point: he was routinely criticized for his inability to wield the authority given him.
Aware of his predecessor’s shortcomings, Macron, with surprising sure-footedness for a political novice, has thus far availed himself of every opportunity to project images of strength—from his white-knuckle handshake with Trump to his firm joint press conference with Russian President Vladimir Putin in the palace of Louis XIV. He also reacted swiftly to the American president’s rejection of the Paris climate accord and signaled his unwavering commitment to the European Union and the Franco-German partnership.
Equally important, he moved quickly to demonstrate that he would not back off his promise to reform the labor code, a controversial task that previous presidents had been unable to make any headway on. A more cautious leader might have delayed venturing into this minefield until after the legislative voting, but last month, Macron called for an early sit-down with union and business leaders who were wary of his intention to give firms more flexibility in setting their own labor rules. His readiness to jump into battle apparently pleased voters, even though the details of his strategy remain vague.
Voters unsure of the president’s intentions nevertheless give him credit for his smooth assumption of power. Commentators have sought to diminish the magnitude of La République en Marche’s victory by noting that turnout in the first round of the legislative elections was low, falling below 50 percent for the first time in the history of the Fifth Republic. Macron’s party received only 32 percent of the votes cast in the first round, meaning that less than 15 percent of France’s registered voters endorsed La République en Marche’s platform as their first choice. But such naysaying misses the true significance of the legislative vote, which marks not so much a new direction in policy as a change in political psychology. French citizens had become accustomed to the idea that reform was impossible. Now, even if they do not like the change Macron represents, they see opportunities ahead. Of course, the very disappointing turnout in the second round, even lower than the first, coupled with Macron’s party winning a somewhat less crushing majority than had been predicted, suggest that the new president could face some nasty bumps as he moves to implement his program.
If nothing else, the cast of political characters on the nightly news has changed overnight. The election has cleaned out the Palais Bourbon, where France’s National Assembly meets. The Socialists were decimated. Even former ministers lost their seats. As a new party, La République en Marche! recruited many of its candidates from outside the political establishment. Hence, the incoming contingent of deputies includes many who have never held elective office. In many cases voters knew little about the La République en Marche candidate for whom they cast their ballot, only that he or she supported the president.
Still, the apparent unanimity of La République en Marche’s massive victory is largely illusory. Macron conquered by dividing. He has put the right in charge of economic policy, the left in charge of internal security and foreign affairs, and the center in charge of justice, European affairs, and the military. This deft separation of concerns will keep ministers of different stripes from stepping on each other’s toes.
Two potentially important fissures have already developed in the cabinet, however. Richard Ferrand, a former Socialist who bolted early to support Macron and helped organize the party, has been tainted by a nepotism scandal similar to the one that wrecked the presidential candidacy of François Fillon of the Republicans. Despite his promise to end such practices, Macron did not abandon his right-hand man, and Prime Minister Edouard Philippe also proved indulgent, while making it clear that Ferrand would have to go if indicted. (He has not been so far.)
To complicate matters further, François Bayrou, who as president of Democratic Movement party endorsed Macron and was rewarded with the justice ministry, had insisted that Macron embrace a new code of ethics for government officials—and then was caught in a breach of ethics himself. Last week, Bayrou phoned a journalist at Radio France, a publicly funded broadcaster, and complained about its coverage of an investigation into the improper use of funds by members of his party who are serving at the European Parliament. The prime minister rebuked Bayrou for failing to adhere to the standards he had made a condition of his support for Macron—namely, that ministers should avoid even the appearance of impropriety and refrain from criticizing the press. As a result, Bayrou’s position may also be in jeopardy, and with it, Macron’s effort to restore confidence in the political class as a whole.
The new government will now tackle labor code reform as its top priority, heading into tough negotiations with a strong majority in the National Assembly. Despite continued resistance to Macron’s proposals, particularly from the left and some trade unions, there is a growing sense that the young president will have his way. The ground has long been prepared, not least by the limited reforms that Hollande permitted Macron to spearhead. French people have been worn down by the protracted fight over labor reform, or what Macron has tried to sell as a Gallic version of Scandinavian flexicurity: weakening job protections for existing workers somewhat in order to encourage firms to hire more of the young and unemployed. Even opponents seem ready to cede some ground in regard to the level of industry at which labor-management negotiations take place and the employment thresholds at which firms are required to accommodate different degrees of union activity.
This burst of good feeling is unlikely to endure for long, however. Macron and Philippe know this and are therefore gearing up to move quickly in other areas. Since labor code reform will be slow to produce results, if it is effective at all, Macron will move on to other headline-grabbing issues. School and pension reforms are the likely next targets. Meanwhile, Macron has extended the anti-terrorist state of emergency yet again. In the wake of two deadly terror attacks in Manchester and London, this was probably inevitable, even if the Constitutional Council has begun to cast a wary eye on the continued extension of police powers without judicial oversight. What is more, Macron’s plan for eventually ending the state of emergency is to incorporate some of its more controversial aspects (such as warrantless searches) into common law. Measures such as these deeply divided the Socialist party and contributed to its downfall. Although the Socialists are now moribund, some of the deputies newly elected on La République en Marche’s ticket may share concerns over normalizing emergency powers.
Still, Macron is basking in success on a scale that even he never dared to dream of a year ago. The French seem to have finally gotten a leader who has rid them of the sexagenarian and septuagenarian politicians who have dominated the political scene for the past three decades. They’re not yet sure exactly what they will be getting in place of the old hands they’ve just decisively thrown out, but for the moment, most seem glad it’s not Le Pen. The demobilization of National Front voters in the first round of the legislative elections was perhaps the most striking feature of the June 11 vote: roughly 61 percent of those who had turned out to vote for Le Pen in the presidential election declined to turn out to make her leader of the opposition. If nothing else, the large majority of voters who did not want to see her elected president are rejoicing in the fact that Macron has delivered them for now from that undesired outcome. And the somewhat stronger-than-expected showing of the opposition parties in the second round may prove to be a blessing in disguise for the new president who might otherwise have suffered from the hubris of a general whose victories have come too easily that he lets his guard down prematurely.