Re-elected President Emmanuel Macron is in favor of reducing the European Union’s dependence on nations outside the bloc while promoting French national interests from within.
In a word
- Discontent with the European Union is high in France
- Emmanuel Macron’s party is the only pro-EU party to succeed in France
- Macron will pursue protectionist trade policies within the EU
On December 31, 2021, a giant European Union flag was hoisted under the Arc de Triomphe in Paris to celebrate France’s assumption of the rotating presidency of the Council of the EU for the first half of 2022. In the 48 hours, the flag was removed following an outcry from French nationalists. claiming that the government had betrayed the Great Nation. Could it be that France is not the champion of something like the United States of Europe after all?
Obviously, many more EU flags would have been taken down had Marine Le Pen won the final round of presidential elections in April. As a result, there was a big sigh of relief in Brussels and most national capitals when President Macron won the second round of the April 24 election with 58.6% of the vote. It is debatable, however, whether this was a resounding vote for Europe, as most commentators claim, or simply a concerted vote against Ms Le Pen.
First, many second-round voters abstained or voted blank. Only 38.25% of registered voters voted for President Macron.
Secondly, it should be kept in mind that in the first round of April 10, a majority of French voters chose a candidate from the radical right (Eric Zemmour, Ms. Le Pen) or from the radical left (Jean-Luc Mélenchon). Each of these candidates advocated dismantling the EU from within by deliberately breaking or ignoring fundamental EU treaty rules that conflicted with the French national interest.
With the old traditional centre-right and centre-left parties crushed (all below 5%), President Macron’s La République en Marche (LREM) remains the only successful pro-EU party in France. And indeed, the French president bravely defended the EU against a wave of Euroscepticism. Polls show that disenchantment with EU membership is highest in Greece and France.
What kind of Europe?
But how pro-European is he really? Or rather: what Europe is he thinking of? This question is important because – whether or not forced to cohabit with a more leftist government – the French president will assume a leadership role within the EU in the years to come. One reason is that after 16 years under German Chancellor Angela Merkel, her successor, Olaf Scholz, is unlikely to develop big ambitions or a compelling vision on the European stage. Mr. Scholz is now seen as a procrastinator, and not just when it comes to showing resolve towards Russia.
For Mr Macron, this has long been a strategy to pursue national interests via European policies and legislation.
Immediately after his election, the French President proclaimed: “I would like to thank all the French people who… have placed their trust in me to carry out our project for a more independent France, for a stronger Europe. The idea of combining a more independent nation-state with a stronger union of member states may seem incoherent. For Mr Macron and most of his predecessors, it has long been a strategy to pursue national interests via European policies and legislation. The key slogans describing President Macron’s European agenda are “European sovereignty”, “strategic autonomy” and “a Europe that protects”.
It is reasonable to suspect behind these buzzwords a long-established French strategy: to create a Europe à la française and to implement French interventionism, mercantilism and protectionism at the European level.
The French have never defended free trade.
A more in-depth examination of the French agenda for the Presidency of the Council confirms this point of view. The French have never defended free trade. Mr Macron wants EU trade policy to use mirror clauses even more strictly, which means that European or, even better, French social, environmental or consumer protection standards must be respected for goods (especially agricultural ) or services imported into EU markets. The basic reasoning is simple: raise rivals’ costs to the already high and often uncompetitive levels created by French overregulation.
Free Trader Resistance
Member states more favorable to free trade, as well as the World Trade Organization (WTO) and European Trade Commissioner Valdis Dombrovskis, fear that the French interpretation of a “level playing field” on a discriminatory basis sector by sector will hinder future trade agreements and lead to endless disputes between trading nations.
The idea of imposing a tax on carbon-intensive imports at Europe’s borders (roughly equivalent to what European producers of steel, iron or electricity have to pay under the market carbon capped and traded European Union) meets with less resistance in Brussels and in the Member States. States. However, the attempt to force the rest of the world to follow EU climate ambitions could lead to further trade disruptions, retaliation and disputes.
Traditionally, France has been at the forefront when it comes to harmonizing taxes, i.e. encouraging other countries to increase their corporate taxes to reduce the relative tax burden of their own producers. Together with the Organization for Economic Co-operation and Development (OECD) and the G20, the first steps towards the taxation of digital companies and the introduction of a minimum global tax rate have already been agreed.
State aid and industrial policy
On the fiscal spending side, France has never been happy with EU legislation that limits state aid to protect effective rules-based competition in the European single market. Here again, Mr. Macron aims to combine the strategic autonomy of France and Europe. A bit like former US President Donald Trump, he defends a national buying strategy, as when he proudly promised “100% French supply chains” for electric cars, offshore wind farms or solar panels . Furthermore, he expects the EU to give the green light to his ideas of letting the French state take control of the capital of other industries such as energy giant EDF.
In addition, Mr Macron wants the EU itself to become a major player in state aid and industrial policy (“pick the winners, protect the losers”) and mobilize huge sums of subsidies to key industries such as chips, cloud technology, hydrogen and batteries. This puts him at odds with Margrethe Vestager, the Danish competition commissioner. And that raises the question: who decides and who pays?
Not surprisingly, France is keen to transform the exceptional emergency tool – the 800 billion euro pandemic recovery fund – into a regular instrument allowing the EU to issue mutualized debt to finance strategic political objectives such such as the strengthening of defence, the fight against climate change or autonomy in areas such as energy, food or digital technology. This would mean that not only is the Stability and Growth Pact that once attempted to control the national debt of Eurozone members likely to be ‘reformed’ beyond recognition. Resistance to debt pooling at EU level is also likely to fade, not least thanks to French stubbornness.
Mr. Macron’s vision for Europe should continue to bear fruit. In fact, Russian President Vladimir Putin’s war on Ukraine and the pandemic have greatly enhanced the overall appeal of a “Europe that protects” and develops strategic autonomy on many levels. These two terrible events have shown that a one-sided reliance on undiversified supply chains (whether Russian gas, Ukrainian wheat, Taiwan-made microchips or Chinese-made masks) can lead to serious bottlenecks when trade is disrupted. It is therefore logical to aim for energy, food and digital independence.
The French interpretation of “sovereignty” or “strategic autonomy” is particular and often smacks of protectionist autarky. A truly liberal reaction would adopt a very different strategy: increase and intensify trade agreements with other countries in order to diversify European import and export options away from unilateral dependence on China or Russia in specific sectors.
What strategy will the EU choose? There now appears to be momentum for Mr Macron’s mercantilist visions of a sovereign Europe. But the question remains whether the momentum will also create a turning point that could accelerate European integration in something like the United States.
One might doubt that an EU with dramatically reduced member state power and competence is what the French president and his predecessors had in mind. Nevertheless, when it comes to migration, energy, trade and state aid to industry policies, Mr Macron seems to be pushing for less Europe. It does so even when it comes to the core function of the EU: safeguarding and extending the single market. Given the recent election campaign and the general mood in France, this inherently Eurosceptic attitude should prevail.
However, President Macron’s desire for changes that lead to “more Europe” (allowing the EU to raise its own taxes, issue its own mutualised debt, subsidize its own industry, create its own army ) faces formidable constitutional obstacles. To become permanent, treaties would have to be changed. And this must be accepted and ratified by the 27 Member States. An explicit and comprehensive Treaty change is a Pandora’s box that most EU Member State governments would prefer not to open. Therefore, a constitutional moment for radical change is not on the horizon. But in the current crisis mode, the prevailing trend may be welcomed by President Macron: a more protectionist, interventionist or estatist Europe.