What can Europe expect from a Macron government?

French President Macron attends a ceremony marking the 77th anniversary of de Gaulle’s resistance call of June 18, 1940. Bertrand Guay/Reuters

French President Emmanuel Macron’s party, La République en Marche (Republic on the Move), captured a decisive majority on Sunday, June 18, in elections for the National Assembly, France’s lower and more powerful legislative chamber.

The victory caps a remarkable six weeks for Macron, who catapulted to the Elysée Palace after his first-ever campaign for elective office, and for his party, which he created just 14 months ago.

It also follows an impressive first month for the new French president, which has included the now famous white-knuckle handshake with US President Donald Trump, and a meeting at Versailles with Russian President Vladimir Putin, during which Macron openly criticised Russian state media outlets Sputnik and Russia Today for being “agents of influence,” and accused them of interfering in this year’s French presidential election.

Now Macron will shift his attention to implementing his economic reform agenda, reviving the Franco-German relationship, and convincing German leaders to pursue deeper integration in the eurozone.

Legislative victory

Just a few weeks ago, many analysts gave Macron’s party little chance of gaining a legislative majority. But Macron once again defied sceptics, with his party claiming one of the biggest legislative landslides in modern French history. Early forecasts project La République en Marche winning 361 out of 577 seats. The record for the most number of seats secured was set in 2002, when Jacques Chirac’s Union for a Popular Movement party won 365 seats.

The mainstream Socialists and Republicans fared dismally, and the parties of the extreme left and extreme right received far fewer votes than they did in the first round of the presidential election on April 23.

The Socialists controlled parliament for the past five years, but they’re now looking to claim just 46 seats. While the National Front expanded its presence from two to as many as eight seats, that total is far fewer than what some analysts and party insiders were forecasting only recently. Jean-Luc Mélenchon’s France Unbowed party and the communists together look set to capture 26 seats.

Posters of various candidates for the French legislative elections in President Macron’s northern city of Amiens. Benoit Tessier/Reuters

The centre-right Republicans will be the main opposition party, but they also lost seats. They are projected to finish with 126 seats, down from 196.

But with record low voter turnout in this year’s legislative elections, some commentators have suggested that Macron’s popular support is not as deep as his parliamentary majority may indicate.

Macron’s agenda

With a solid parliamentary majority behind him, Macron has a much better chance of implementing his economic platform.

France’s economy faces a range of problems: Unemployment, at nearly 10%, remains stubbornly high. Among young workers, it’s nearly 25%. France also faces slow growth, high levels of public spending, chronic budget deficits, and rising public debt.

Macron has vowed to make French firms more competitive in the global marketplace. He wants to allow businesses to hire and fire more easily, give companies more flexibility and latitude over wages and working hours, trim France’s bloated civil service sector, lower corporate taxes, reduce some pensions, cut public spending, and relax safeguards on the 35-hour working week.

The last three French presidents faced fierce resistance when they tried to change France’s labour and pension laws. National strikes and street protests stymied their efforts.

Macron has momentum, however, and his vision of governing from neither the left nor the right still carries some novelty among many French voters. But to implement even half of his ambitious economic agenda, Macron will have to find a way to succeed where his predecessors failed.

Franco-German axis

Reforms at home are a precondition for Macron’s hope for a rejuvenation of the Franco-German relationship. If Macron cannot deliver at home, German leaders will not take his reform proposals for the eurozone seriously.

The economic performance of France and Germany has diverged widely over the past decade. France’s unemployment rate is more than twice as high as its neighbour across the Rhine. Germany is an export powerhouse, whereas French exports have been declining. As a result, Germany increasingly calls the shots today in eurozone governance.

Macron has surrounded himself with top advisers who know Germany well, speak the language, and can explain France and France’s situation to a German audience. He will also try to get German leaders on board for wide-ranging eurozone reform. Among other propositions, Macron has suggested the introduction of a eurozone finance minister and the creation of a common budget for investment and fiscal transfers throughout the bloc, which, he claims, would help stabilise the currency zone and give a lifeline to countries in trouble.

Angela Merkel (Germany) with Emmanuel Macron (France) and Paolo Gentiloni (Italy) during the G7 summit in Italy on May 26 2017. Darrin Zammit Lupi/Reuters

Opposition to these ideas runs high among those in German Chancellor Angela Merkel’s Christian Democratic Union party (CDU). On the whole, German officials are taking a wait-and-see approach when it comes to Macron’s ability to reform France’s ailing economy.

They remain reluctant to implement wide-ranging eurozone reforms. And German officials, such as Finance Minister Wolfgang Schauble, fiercely resist the idea of the eurozone becoming a permanent transfer union. They also say that Macron’s ideas would require treaty changes, a risky undertaking in today’s political environment.

Instead, German leaders are more likely to pursue smaller though symbolically important initiatives with Macron’s government, such as joint investment projects, the harmonisation of corporate tax rates, closer security and defence cooperation, and moving forward on the digital and energy union fronts.

Tough road to reform

With his legislative victory in hand, Macron now embarks on the tough road to reform. Convincing French voters that his policies will benefit them may turn out to be his toughest political test yet. And it will show the degree to which French citizens have embraced him and his ideas.

Europe needs Macron to succeed. A strong Europe needs a strong Franco-German core, especially in the time of Brexit, Trump, and creeping illiberalism in Hungary, Poland, and other parts of Europe.

German leaders want a strong France. They are wary of being seen as too powerful and assuming all the burdens of leadership, and know from long experience that crises are more effectively dealt with if France and Germany work together.

The road ahead is uncertain, and will be filled with challenges both foreseen and unforeseen. But across France, after many years of incessant talk of French decline and malaise, a new attitude can be seen: one that is hopeful, confident, and optimistic about what the future holds.

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