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?