France’s Looming Black Swan

By Roy He

On April 23 and May 7, more than 35 million French citizens voted on who would lead their country for the next five years. Everyone knew this election was special — with the economy at a standstill, terrorist attacks becoming “part and parcel” issues concerning Muslim immigrants and refugees cast aside due to intolerance, and the role of the European Union in question.

With the rise of nativism and right-wing populism, resulting in the victories of Brexit and Donald Trump, National Front candidate Marine Le Pen was expected to perform better than her party’s previous attempts. The right-wing nationalist led in opinion polls for a long time and was expected to triumph in the first round or even win the presidency according to political prediction markets. In fact, National Front won the biggest share of votes in the first round of French regional elections in 2015 right after the Paris attacks. Although it ultimately failed to win any region in the general election, it proved capable of shaking the political establishment.

Emmanuel Macron, the 39-year-old former technocrat and investment banker, took the lead in the first round and won the second with one of the widest gaps in French history (66.1 percent vs 33.9 percent) against Marine Le Pen. This result was a relief for the European political establishment, mainstream media communities, and financial markets because this win — along with the victory of central-right VVD in the Dutch election this past March — seemed to mark a halt of right-wing populism. France’s CAC index climbed 4 percent and Deutsche Bank, one of the largest European banking groups, rocketed 11 percent on April 24, the first trading day after Mr. Macron’s better-than-expected victory in the first round vote.

However, the election results of this E.U. powerhouse are definitely not a turning point against the rise of nativism and right-wing populism so long as social and economic problems are worsening. People are becoming angrier with the out-of-touch, negligent establishment and their agenda of a centralized bureaucracy, open borders, and forced multiculturalism.

Before the primaries of mainstream parties, then-president Socialist François Hollande had given up the chance to seek a second term. His historically low approval rate dropped to 4 percent in November of 2016. During Hollande’s presidency, France struggled with stagnation in the economy, a high unemployment rate, intensified domestic terrorism, and the refugee crisis. Hollande won in 2012 with a radical and out-of-touch leftist platform, promising “Le Changement.” But soon his policies were blocked and he was caught up in personal controversies.

As a result of the disastrous Hollande presidency and lack of strong candidates, the Socialist Party experienced a fiasco in the presidential election with only 6.36 percent of the votes and is expected to suffer in the coming parliamentary election in June. The avalanche of Socialists should have been a great opportunity for the other mainstream party, the moderate-right Republicans. But it is not. Their candidate, former Prime Minister François Fillon, once had the best chance for the Elysee Palace last winter but was shattered by political scandals since the end of January and was outed in the first round at third place with 20.01 percent of the votes. It is worth mentioning that “the French Thatcher” was not only a big fan of limited government, lower tax rates and spending cuts, but also quite socially conservative — similar to “conservatives” in the American political spectrum and rare among French politicians.

The two mainstream parties on left and right, which used to acquire about 60 percent of votes in the first round and dominated the second, received only 26 percent of the votes and were ousted in the first round. This is historical since it officially marked the collapse of the post-war political landscape dominated by two main parties on the left and the right.

Although self-identified and widely described as a centrist, Emmanuel Macron is actually just another Socialist president, albeit more realistic when it comes to the economy and finance. He supports almost every issue on the leftist agenda like open borders, climate change, European integration, and globalism. His newly founded party, “En Marche!,” is just another brand of the left-wing establishment despite their emphasis on trans-partisanship, a transcending of the traditional left and right. Even if it is not a “one man’s party” that fades away after Macron’s retirement, its current momentum is largely based on Macron’s young, capable image and the political vacuum resulting from the marginalization of two main parties. If the grassroots organization of Macron’s team is a success in the future, En Marche! will absorb some competitive candidates from the Socialist Party and replace Socialists as the mainstream left.

There is not much to expect from The Elysee Palace in the next five years. Macron’s presidency will likely be a continuation of the establishment agenda. The current wind in politics is not in favor of leftists, especially in economy, budget, and security, so we can expect Macron to be more “centrist” on these issues. But more importantly, the roots of these problems are those President Macron does not have the ability or willingness to change.

The problem of the underground Jihadist network — a result of the inflow of Jihadists and the radicalization of some domestic Muslims — is not only an issue of immigration and assimilation, but also one of the consequences of large bureaucracy and centralized state. This administrative state weakens the self-organization of society and destroys its capabilities of autonomy, which makes it easier for Islamic radicalism to exist. Macron and his party, as other establishment politicians, are all fruits of such elitist bureaucracy. They will not and cannot bring real changes to this interlocking system. And, to be honest, this system is too big to reform from the inside.

As a Europhile, Macron made being “pro-E.U.” a major selling point of his campaign. So how can he solve or even recognize the problems concerning open borders and the Euro which are rooted in the E.U., a bigger version of administrative state dominated by centralized, out-of-touch bureaucracy? Time goes by and the consequences of all these problems in France will accumulate and worsen. The status quo is unsustainable. The black swan may be waiting to take off in the near future.