The French Election: Round Two of Europe’s Internal Leadership Battle
By Richard Matthews, London
Live Squawk News, 18 April 2017
The French elections are unlike any others and, with two of the parties under 18 months old, certainly full of new ideas and thoughts. The lines seem to be blurred between parties and it does seem plausible that the election will come down to the personalities of the leaders as much as the policies of the parties.
However is there now a very real possibility that the French electorate, emboldened by seeing how Britain is thriving, will turn their back on centrist politicians and their policies and chose the more radical options or after the terror attack in Paris will they plump safe with Fillon? In a week where an ultra-safe politician, Theresa May, has gambled on an unnecessary election will the French also gamble on the unknown?
Over the last couple of weeks Melenchon has made great advances in the opinion polls and pre the attack of last night looked like a good outside bet to make the final run off. However one gets the feeling that after the recent terrorist outrages in France, with the memories of Bataclan being awakened last night, he may have run his course and won’t make the last two .As a consequence of this, ironically, the votes of the Ultra Left may drift to the ultra-right and strengthen Marine’s chances .At first sight this seems bonkers but often if you compare the attractions of extreme left and right wing policies they appeal to the same people. This has been evident in the UK where traditional Labour voters have been seen to be more likely to vote UKIP than Conservative. Basically Blue collar workers share the same fears.
Looking back over the last twenty-odd years, candidates for the French presidency promised to make changes and get the French economy back and properly working again. Unfortunately, these promises have led to very few changes. The previous conservative President Sarkozy promised sweeping reforms when he became President in 2007, but little came of them, apart from a reform of the retirement age.
His unpopularity led to the victory of his Socialist opponent François Hollande. Hollande, whilst President, has achieved even less. He promised to cut France’s high unemployment rate, and to revitalise the economy. But if he has just about got the economy back into positive territory, he has failed dismally on the unemployment front, and the number of jobless in France today is far higher than it was when he took office and stays stubbornly around the 10% level. This has led to disenchantment amongst the youth and when combined with a seam of Radical Islamists the country appears uneasy with itself.
Hollande is now the most unpopular French president in nearly 75 years, his approval ratings hovering around the 4% mark. His Socialist party is now bitterly divided between the moderate reformers and the hard-line left, and by trying to please both wings of his party, Hollande has managed to achieve that rare thing of displeasing almost everyone.
Unlike the two party political systems that the UK and US enjoy, France has a selection of parties that seemingly cover every single voting wish of its population. Perhaps this accurately reflects the nation as much as having nearly 250 regional cheeses does. Recall President General Charles De Gaulle’s remark of: “How can you rule a country that has 246 varieties of Cheese. “ What appears at first simple in analysis of France’s party system is in reality far from it. Often right-wing policies are favoured by left-wing parties, and vice versa.
“Les Républicains”, the Republicans, are the main Conservative or centre-right political party and are led by Francois Fillon. They are the closet heirs to the politics of the legendry French leader De Gaulle. Sarkozy engineered the name change in 2015 to draw distance from predecessor party Union for a Popular Movement (UMP), founded in 2002 by ex-president Jacques Chirac .They have been in turmoil since the 2012 election defeat and the scandal of Penelopegate may have fatally wounded Fillon.
Marine Le Pen’s National Front party was formed by her father, Jean-Marie Le Pen, in 1972. Historically of the extreme far right — virtually Nazi apologists — it has tried hard to become more mainstream since her father resigned in 2011. Despite persistent attempts to moderate its image, including the expulsion of former key members including Le Pen senior, the shadow of the previous leader still seems to hang over it.
France Insoumise! (France Unsubmissive) was newly founded, only a year or so ago, by Jean-Luc Mélenchon. It’s a hard-left party with green overtones, and a charismatic leader who at times appears to overcomplicate its polices. He is committed to high tax levels and changing fundamentally France’s relationship with Europe.
BenoÎt Hamon’s Socialist Party is a more traditional socialist party tracing trace back to the 1880s and the fallout from the Paris commune and over the years has seen Francois Mitterrand and Hollande elected as presidents, but now seems a bit dated and could disappear completely after this election.
En Marche! Is the centrist independent party fighting its first election? Economically liberal, but left-wing on social issues, En Marche! was founded in 2016 by the charismatic Emmanuel Macron. The party appears to be seeking to cross-traditional political boundaries to become a trans-partisan organisation — in other words a mix of left and right wing politics.
The establishment money has been talking a safe no change in the status quo election. They would wouldn’t they? They may well turn out to be correct with the “Justin Trudeau Light “politician Macron being their choice. Regardless of this after the seismic political events of the last two years it would be foolhardy to discount another political earthquake. If Le Pen , which most commentators are forecasting , makes the last two do not rule out her chances of winning . In terms of markets my sentiment is to be short the Euro and European Bourses (including London) and long of Gold, Dollars and Sterling. It is hard to ignore the fact that there have been large flights of capital from France in recent days and as they say, money talks.
Richard Matthews, who began in career in 1973, is a former trader-broker in the London money, futures and foreign exchange markets. Twitter @dickiematthews5
This column is the opinion of the author and does not necessarily reflect the opinion of Live Squawk.