Tuesday, May 9, 2017


My optimism about German flexibility on austerity may have been misplaced. Merkel has thrown cold water on Gabriel's more effusive statements about the need to jettison fiscal orthodoxy and fund a Franco-German investment fund. Remember, however, that she faces an election in September and has to play to the galleries. But nothing much will happen before autumn.

Meanwhile, Marine Le Pen is under increasing fire from within the FN. I expect she will soon sacrifice Philippot in the hope of saving herself.

Manuel Valls announced this morning that he will run for the AN on the République en marche ticket (this being the new name of En Marche!). He said his "values" continue to be socialist, but the Socialist Party is dead. Meanwhile, Hamon seems to be looking (still) for some kind of alliance with Mélenchon, presumably this time as a humble supplicant.

All this suggests that the rumors that Macron will turn to the right for a PM make political sense. The PS is in full disintegration mode, and he really needs to prevent LR from regrouping as a unified opposition bloc. But my guess is that he will not want to put himself too much at the mercy of the Juppéistes either. Look for a surprise, such as Sylvie Goulard, whose European credentials and gender would better suit the renewal theme (and also allow Macron himself to dominate the domestic agenda).

Meanwhile, even the CFDT is putting Macron on notice that he'd better not be too high-handed in pressing labor code reform.

Finally, the Harvard Gazette interviews me on the election.


c.i.b. said...

It all hinges on the results of the German elections. Merkel will give Macron very little, which bodes ill for the next presidential round. In other words Macron really wins if Schultz wins. Of course Macron could decide to face Merkel with a coalition of large domestic demand countries in the South but I wonder what his leverage will be.

Anonymous said...

I heard Merkel 's statement, and she said something like 'while our system has worked very well for us, we must take into consideration that it may not have worked as well for some of our valued partners'.
Macron's leverage is 'I won't run up a deficit but if you don't give me some leeway in 2022 Europe has a huge problem.'

Arrets sur images found him a nice nickname : le Barrage.

Taking on Valls as a depute would be a big mistake for Macron. Especially since he called him a traitor yesterday in that (very well-done and interesting, if hagiographic) documentary. It'd signify his claims of renewal were just for show.

The only way for the PS as a 'party of the left that wants to govern ' is to be an opposition to Macron. Whether you agree with Hamon or not, clearly joining Republique en Marche means diluting the PS, especially since there's a tradition of voting in lockstep in the French parliament.

Anonymous said...

Art, a couple of things on Germany and austerity:

1) One problem in the "more flexible Germany" narrative is the continued weakness of the German Social Democrats. I never once believed Martin Schulz, who has never been either a federal cabinet minister or, more importantly, a state premier, had a serious shot at overtaking Merkel's Christian Democrats at the upcoming federal election. Sunday's regional vote in Schleswig-Holstein shows how illusory these hopes were in the first place.
2) I ask myself how much the word of Macron, a young man and still little-known quantity, will carry not just with Angela Merkel, but also, and just as importantly, with Wolfgang Schäuble. The man is not only an elder statesman. The Christian Democrats have long portrayed as an intellectual giant whose prestige and moral authority now make him, de facto, a sort of associate Chancellor. It may be that the three hit it off and come to some sort of happy compromise, but I wouldn't work on that assumption.


Ymus Anon said...

According to Le Figaro and Libération (not Le Garofi ou Bilération) Marion Maréchal throws the towel and will retire from political life.
Understandable... she is not her aunt favorite niece.

bernard said...

While I am quite certain that Manuel Valls wants to run under the Republique en Marche label, I am not quite certain that Republique en Marche has nominated Manuel Valls. We would do well to wait for Thursday when Republique en Marche will officially announce its candidates. And Manuel Valls would do well too.

bernard said...

And since we speculate, I feel quite sure that Sylvie Goulard will be either PM or Foreign Affairs.

Mus Anony said...

I speculated that first ! ! !

Lapinot said...

"Volcanic Macron forces Germany to come clean on its real EU agenda" - Ambrose Evans-Pritchard http://www.telegraph.co.uk/business/2017/05/08/volcanic-macron-forces-germany-come-clean-real-eu-agenda/

It's the Telegraph, so obviously anti-EU, but seems broadly reasonable and convincing.

'French voters have picked an apostle of Europe and an arch-defender of the Franco-German axis. While this is welcomed with jubilation by some in Berlin, it raises thorny questions that others would prefer left unanswered.'

Anonymous said...

Temporary retirement while she sorts out her divorce and the party sidelines her aunt after kicking Philippot out. She's playing the long game.

Anonymous said...

100% with Bernard on that one.
Valls may have outplayed his hand.

Mitch Guthman said...

I hate to keep being the voice of unrelenting negativism but all we’ve been been hearing for nearly a decade is how Merkel is certain to become more flexible on austerity and “fiscal orthodoxy” right after the next election.

Sometimes, I read these pronouncements about just getting through the next German election, after which Merkel will become more Keynesian, and I feel as if I’m in a theater watching “Waiting for Godot” but instead of leaving at the end of the show, the first act simply begins again and everyone stays in the theater waiting for the play to end. But it never does.

At some point, everyone needs to accept that Godot isn’t coming and Merkel isn’t going to be jettisoning fiscal orthodoxy until the economic recovery has come and gone and come again. Europe needs a better plan than waiting for Merkel and Germany to come around to the virtues of Keynesian economics.

Anonymous said...

*overplayed!! His hand

Robinson said...

I don't care for Valls and he certainly has no place in Macron's cabinet. Humiliating Valls by running a candidate against him, however, is a bad move. I recall that Hollande, while he was pretending to be a leftist, did the same to Bayrou. Hollande lived to regret this act of ingratitude when he turned to the center.

Valls supported Macron in round one: certainly not out of affection, but that is beside the point. French politicians never, ever go away. It is a bad idea to humiliate somebody for supporting you, and bringing Valls along as one of 577 deputies will make it easier for En Marche 2.0 to split the PS. In terms of their actual political positions Valls and Macron are practically indistinguishable, if we except some of Valls's Sarko-lite, tough guy tics.

I don't think that Macron's promise to bring in political outsiders will amount to much: this kind of gesture ordinarily means either window-dressing or the selection of inexperienced incompetents (as with the M5S in Italy.) Macron is par excellence the candidate of the political class: his "renewal" has been to re-order the party system and let the moderates of the right and left work together instead of fighting. This is not nothing! But the French economy can only really be reformed if Germany is willing to make concessions on the Eurozone: all major French politicians know this, Sarko and Hollande both ineffectually requested it. Can Macron make the Germans budge: this is the major question of his presidency. It is on this question that I've always found Art overly optimistic.

bert said...

Schäuble has long blamed Germany's current account surplus on QE. He did so again last week. Nobody should expect any relief from that quarter.

With Macron's strongest card a credible threat from the FN, MLP finally has an opportunity to deliver something meaningful for the French national self-interest. True to form, she's fucking it up. Granted, she has quite a way to go before she sinks to UKIP levels. UKIP was barely ever a political party, and since 2015 it's not been much more than a fight in a pub carpark. But a comparison with the AfD could be made - a battle over strategic direction becoming messily personal.

Anonymous said...

Schneiderman got it when he called Macron Le Barrage (tHE dam) - Macron's leverage is that if he gets no leeway next time there's nothing stopping MLP.