This is a highly-cited, excellent read from Martin Wolf, the FT’s Chief Economics Commentator. He argues that France’s economy is no basket case, but the president-elect still has problems to solve.
Source: Emmanuel Macron weighs up France’s biggest challenges – FT.com
Wolf focuses on France three core economic problems, namely:
- Low employment
- Low rate of economic growth and
- Sheer scale of public spending
But Wolf is quick to recognize the these are just France’s core domestic economic problems. There is an equally pressing external economic challenge, the Euro, which has given Germany economic growth at the expense of countries like France.
Politically, there are three urgent reform challenges:
- Legislation to free up the French labour market
- Reducing the trajectory of increasing French public expenditure
- Reforming the Euro
Both (1) and (2) require the execution of enormous reforms, in areas where past presidents of both the left and right have failed. But for the moment, President Elect Macron has no power-base in the French Parliament.
The third reform requires the support of the German government and German voters to accept a lower trajectory for German growth. Again this is huge challenge.
But the bottom-line is that if Macron fails to deliver on the above reforms, the Far-Left and the Far-Right will return more strongly in France’s next presidential election. The risks are massive, both for France and the EU. It reminds me of Barack Obama and Tony Blair, they seized power with colossol popular support but they squandered their advantage, when they allowed their resolve to slacken.
This leaves me with an open question:
Does President Elect Macron have the political tenacity and leadership skills to be a truly reforming president?
Dr Alf has hit the nail on the head and the jury for me is still out.
The French people just like people here in the UK, have an issue with productivity and the gap between those with everything and those disadvantaged by Globalisisation, migrant flows disrupting the bottom end of the job market, automation, AI, robotics, machine learning, 3D printing, cybernetics and nanotechnology getting bigger by the day.
Successive Governments have failed to discuss the scale of impending job losses honestly and yet in Bilderberg meetings AI sits at the top of their agenda including the four-year old prediction by Eric Schmidt of Google, made in the summer of 2013, in which he predicted that 50% of American jobs would be gone by 2033.
That meeting didn’t say how many British or French jobs would have disappeared just 16 years from now but an educated guess based on productivity figures might be 75% or more.
France has not had the hard won labour reforms that Mrs Thatcher brought about which didn’t go far enough so are we to believe that Macron is going to stop French lorry drivers from blockading ports and motorways or facing down feather-bedded car-workers or stopping French farmers from burning imports of British lamb?
The record of French politicians so far indicates that Macron has no answers to these problems despite his considerable intellect.
Whilst wishing the man well the prognosis is not good because if he imagines that following BREXIT he can buy time by getting the UK to stump up £85 billion GBP in a “divorce settlement” plus string out the Article 50 discussions to get the net budget contributions of £12 billion GBP a year on top, he is deluded.. The reality is the EU’s own lawyers have said that there is no legal basis for the £85 billion GBP claim but despite that Macron and the other EU leaders have decided to proceed with these unreasonable demands anyway. Future liabilities based on things which the UK has “signed up to” are contingent liabilities based on UK continuing membership and would have to be balanced against a full audit of the EU’s accounts to identify fraud and financial misappropriation of our EU budget contributions over the last 22 years.
Macron is someone who is put forward as a “virtual unknown” with no political power base but in fact is nothing of the kind. He was chosen as the future leader of France in the Bilderberg meeting which happened in Copenhagen a few years back at which all other European leaders attended along with the BBC and the editors of the Financial Times and the Economist. As per custom and practice none of these esteemed media representatives reported any of this to the great “unwashed” in France, the UK or anywhere else in Europe so Macron is not the open and egalitarian saviour of France that people make him out to be.
He has little time, perhaps 100 days at best, to craft a plan and start “frog boiling ” reforms to ossified French labour markets that stand a chance of success and that will not provoke riots and he has to find ways of finding useful work for the young unemployed and the festering problems of Muslim migrants who have little stake in the country and are all too easily radicalised.
As a man who believes in open borders something is going to have to be done to restrict future migrant flows because President Erdogan of Turkey has created another time bomb for Europe and the youthful Macron in the form of a deal he (Erdogan) has struck with the African Union to take in their unwanted people as “refugees”/economic migrants in exchange for money and better trade for Turkish business in competition with the Chinese.
As we speak political PR specialists who speak fluent French are traversing the African continent with the promise of Turkish money for “development” in exchange for more business with Turkish companies in preference to Chinese ones.
Erdogan will of course take in African migrants whose numbers are about to increase as the prospects for civil war increase in South Africa with President Zuma’s proposed Zimbabwe style land grab of all white owned properties with whites in the bush training for war wearing their old Apartheid era uniforms.
Those African migrants complete with fake documentation and new passports are going to end up in France at some point and Macron will have to deal with them in France because the UK will not accept them but may have to take whites fleeing from what is likely to happen in South Africa unless wiser heads prevail.
Macron may have answers to these problems but like my former and now late father in law who came from St Louis, Missouri I say “Show me”.