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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The writer is the Robert M Solow Professor of Economics emeritus at MIT
The story of Emmanuel Macron’s presidency, culminating in his decision on June 9 to dissolve the French national assembly and call fresh legislative elections, is a tragedy in four acts.
Act one was the 2017 presidential election. Macron created a new centrist party, En Marche (now Renaissance), marginalising the formerly dominant parties of centre-left and centre-right, and leaving only the extremes as alternatives.
It looked like a brilliant move — in two ways. Politically, the new party was broad enough to help Macron to an easy victory over Marine Le Pen in the presidential election, and then to obtain a large majority in the legislative elections that followed. Policy-wise, it allowed him to cross the traditional red lines of both left and right.
The second act was Macron’s first quinquennat. There was soon growing dissatisfaction with both the style and substance of his presidency. He was perceived as imperial, “Jupiterian”, acting without consultation, while his reluctance to use redistribution to reduce inequality fed a perception that he was the “president of the rich”. In the absence of viable alternatives on the centre-left and centre-right, voters were attracted to the extremes, with populists on the far right vilifying immigrants, and populists on the far left, reflecting a long-standing French Marxist tradition, railing against the rich.
In act three, Macron’s second term, the centre became weaker. His party failed to secure an absolute majority in the 2022 parliamentary elections, forcing the government to rely either on the votes of the small centre-right party or on the use of article 49:3 of the constitution, which allows it to pass measures without a vote.
Voters, who did not care much about the European parliament itself, treated the European election in May as a referendum on Macron, now widely disliked. Given the catastrophic outcome for his party at the ballot box, the president decided to dissolve parliament.
Which brings us to the fourth and final act: the legislative elections. The centre has shrunk and aversion to Macron has led, in turn, to an aversion to his party.
The electoral system, in which only parties who secure the support of more than 12.5 per cent of registered voters in the first round move to the second, does not give much of a chance to candidates from small parties. As a result, part of what remains of the centre-left has joined the far left in a coalition, known as the New Popular Front; and part of what remains of the centre-right entered a pact with the far-right Rassemblement National.
A majority of voters say that they will not vote for the centre party and so their only relevant choice is between the coalitions at the two extremes.
The RN offers a purely populist agenda, based on hardline immigration policies and protectionism. Its economic programme is largely an afterthought, an unfinanced list of gifts to distinct groups of disaffected voters.
The NPF’s programme is more internally coherent. It calls for a major redistribution from the rich to the poor and from companies to workers, resting on the assumption that this will not affect growth. It includes a 90 per cent marginal tax rate on income, a 100 per cent tax rate on inheritances worth more than €12mn, and the reintroduction of a substantial wealth tax. If enacted, both programmes would be likely to lead to a major financial and economic crisis.
The two most likely outcomes of the forthcoming elections are an absolute majority for the far right, forcing Macron to name a prime minister from the RN (which, he hopes, would in turn lay bare the party’s incompetence, and change the outlook for the presidential election in 2027), or, more probable, a situation in which neither the extremes nor the centre commands a majority in the national assembly.
In the second scenario, it would be hard to see how a majority administration could be assembled. A new government formed in these circumstances would be unable to do much, and would be forced to rely on article 49:3 in order to enact its legislative programme. Ironically, the outcome of voters’ thirst for change could be paralysis.
There are many lessons to draw from this four-act story. The main one is that creating a new centre party turned out to be a dangerous strategy. A resilient democracy needs functioning parties of the centre-left and centre-right. These may well eventually re-emerge, but the journey is likely to be arduous.
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