By Dan Steinbock
Even if Marine Le Pen would win the first round of French presidential election, she would face great odds in the second. Yet, in one sense, she has already won. In France, the political future belongs to her agenda.
After Prime Minister Mark Rutte was able to deter the surge of radical-right Geert Wilders in the recent Dutch elections, the EU leaders sighed for relief. In international media, the center-right Rutte’s win was reported as triumph for “democracy.” In reality, it was boosted by his appeal to Dutch ethnocentrism.
Michael Gelband's hedge fund ExodusPoint ended 2021 on a strong note after its Rates strategies contributed 1.16% to overall performance in the month. According to a copy of the fund's December update to investors, which ValueWalk has been able to review, the ExodusPoint Partners International Fund Ltd rose by 1.95% during December, bringing its year-to-date Read More
After months behind Wilders in polls, Rutte stated that he shared feelings of those who thought that people who “refuse to adapt and criticize our values should “behave normally, or go away.” The pre-election clash between the Netherlands and Turkey allowed Rutte also to play the same card internationally. The tacit signal was: Why would you want to vote for Wildeers, if I can deliver the same goods?
By the same token, the real story of the French election is not whether the winner is Macron, but that the winning agenda has been re-defined by the rise of Marine Le Pen.
Less integrated Europe, ah oui!
Domestically, the new president will struggle to push for (subdued) structural reforms with or without the consent of the unions, while taking a stricter view of immigration and a tougher stance against Islamic fundamentalism.
France will have a more critical stance toward further EU integration, and the euro, which the French voters now share from center-right to center-left. In practice, that means a “multi-speed Europe,” in which one size will not fit all, while uneven development will increase. Integration will make room for fragmentation, which will be called “differentiation” because the latter sounds better.
As Hollande himself recently acknowledged: “For a long time, the idea of a differentiated Europe, with different speeds and distinct paces to progress, has provoked a lot of resistance. But today this idea is necessary. Otherwise, Europe will explode.”
In Brussels, Macron is seen as a potential savior of France and the EU. The greatest fear of the EU leaders involves Le Pen’s quest to unilaterally take France out of the Euro in 6 months, which would be followed by the effective redenomination of €1.7 trillion of French public debt into francs. Since 80 percent of this debt is not under international law, FN would have the right to change the currency.
Unsurprisingly, the international ratings agencies, which are headquartered in the US and the (about to Brexit) UK, have already warned that the net effect would be the largest sovereign default on record, nearly 10 times larger than the €200bn Greek debt restructuring in 2012.
Like biblical prophets, Le Pen’s adversaries have warned that her victory would mean a French Armageddon, the plunge of euro, and chaos in the world financial system. In contrast, Le Pen’s economic advisers argue that reintroducing a national currency would allow French franc to fall in value against the euro. That, in turn, would lower France’s total debt burden and permit Paris to begin competitive devaluation.
After all, Le Pen might say, isn’t that something Americans have excelled for decades? The franc served the French well for centuries, while the euro has caused the French and many other European economies one nightmare after another after just one decade, she might add,
If Le Pen wins, Paris will also start a process that could ultimately result in a ‘Frexit.’ That’s something that would be unthinkable to the Europhile Macron.
More independence in foreign policy
Like her supporters in right and left, Le Pen believes in French patriotism that relies on a sovereign state that is not reliant on conservative capital, socialist class struggle or Washington’s neoconservative tutelage. That’s classic Gaullism, which stresses national sovereignty and unity. Macron would not use the same terms, but he does emphasize French national interest, along with EU federalism.
Neither De Gaulle nor the Gaullists supported Europe as a supranational entity. However, they favored European integration as a confederation of sovereign states engaged in common policy, and autonomous from the superpowers, such as the United States and the bygone Soviet Union. That project failed as other European powers chose to remain closely allied to Washington. While all French candidates see France among the West, none advocate Sarkozy-like reliance on Washington any more.
In foreign policy, the new president will be more cooperative with Russia and President Putin, from the Middle East to Ukraine and energy issues. While France may actually invest more in defense spending, Gaullism is predicated on greater skepticism toward the NATO and harder push for French national priorities.
In foreign policy, Macron is closest to Washington and his team has suggested that Russia may be intervening in the French election. Other candidates do not share his view and France is not as vulnerable to Russophobia as the United States. Furthermore, recent Wikileaks disclosures suggest that it is not so much Moscow that Paris should be concerned about – but Washington.
US efforts to shape French elections
In the 2012 French presidential election – as classified CIA “tasking orders” indicate – the agency engaged in a spying campaign ahead of the election. The documents reveal that all major French political parties were targeted for infiltration by the CIA’s human and electronic spies in the seven months leading up to France’s 2012 presidential election. According to the most recent WikiLeaks documents, televisions, smartphones and even anti-virus software are all vulnerable to CIA hacking, which makes any effort to shape the outcome of the impending elections and referendums in Europe relatively easy.
There is no reason to presume that these practices have changed. Washington and Pentagon favor pro-NATO candidates and will walk the talk. However, the two also tend to like candidates, who portray themselves as “beyond left and right,” as Macron has done, but who understand the US interests. That’s what he proved already in 2012 when he joined the pro-US French-American Foundation (FAF). It is a think-tank that was launched by the US-based Council on Foreign Affairs in the 1970s to counter anti-French sentiment in the US and anti-Americanism among the French elite.
As a FAF “Young Leader,” Macron is walking in the footprints of Bill and Hillary Clinton in the US, and president Hollande and former prime minister Alain Juppé in France. Unlike Le Pen who wants more independence, or Fillon who believes in realpolitik, not to speak of anti-NATO socialists, only Macron is seen as a proven quantity in Washington.
Dr Steinbock is the founder of DifferenceGroup. He has served as Research Director of International Business at India China and America Institute (USA) and Visiting Fellow at Shanghai Institutes for International Studies (China) and the EU Center (Singapore). For more, see www.differencegroup.net
The original commentary was published by The World Financial Review on March 21, 2017