Macron’s Reforms are Key to France’s Leadership in Europe

Not long ago, France’s Emmanuel Macron stunned Europe with an overwhelming presidential victory, subsequently reinforced by his movement’s triumph in legislative elections. Macron was perceived as an antidote to Donald Trump and the populist movements—including France’s National Front and the increasingly authoritarian governments of Poland and Hungary—that assail globalization and liberal democratic values while championing economic nationalism.

His victory was also seen as a chance to reinvigorate the European Union, battered from the left and the right, which seemed on the way to unraveling after Brexit.

A few months on, Macron is pursuing, with an acceleration more typical of robotics than politics, two simultaneous objectives: reforming the French state with free-market policies and leading Europe. They are admirable targets, but they cannot be simultaneous. Before leading Europe, he must reform France, for if he fails to do so, that monument to state control, Europe, will not line up behind it. That is, if he does not (begin to) reverse France’s mammoth government interventionism, Macron, enamored of his oversized international role, he will end up pushing for an even more bureaucratic Europe.

Why? Because without a mandate to move his neighbors towards freer markets and liberalism, he will embrace bureaucracy as the only realistic way to establish a legacy.

Macron should bear in mind the case of Brazil’s Lula da Silva, who intended to lead the “emerging” countries and change the world before proving he was capable of changing Brazil.

Macron has launched, or announced for future implementation, audacious reforms. They range from reducing state spending to rationalizing pensions, from privatizing government-run enterprises and shrinking the bureaucracy to reducing protectionism and dismantling some barriers that keep 10 percent of France’s workers, and one in four young people, unemployed.

Three obstacles conspire against him. One, his growing unpopularity, matters little for now because no one is popular in France today. The second, the left and extreme right, is not an imminent threat because of the post-electoral chaos they are in. The third, the socialist instinct of the right, is dangerous. France has the world’s most socialist right. Conservative opposition to Macron’s (semi) free-market reforms, which some bitter losers of the election are trying to build up, could facilitate an ideological massacre of the government at the hands of the left and far right once they overcome their post-election shock.

What Macron aims for is cultural, even more than economic, change. Regis Debray, a well-known former left-wing intellectual, has written that Macron represents a “neo-Protestant moment” in a country with a tradition that is both Catholic and lay (“catho-laique”). Debray refers not only to Macron’s embrace of capitalism but also to his push for a moral regeneration that separates him from the traditional right, whose last presidential candidate was engulfed by an ethical scandal.

Macron’s reforms should frighten no one. We know they work. An obvious example is Germany, France’s neighbor, which implemented them more than a decade ago and whose economy is a locomotive that not even the recent and dreadful European decade could stop. Taxation in France gobbles up 46 percent of the wealth while in Germany it absorbs “only” 38 percent; French taxes on capital are almost double those of Germany. According to the COE-Rexecode institute, the costs that make production more expensive in France amount to almost 18 percent of GDP, twice as much as in Germany.

Germany is the current leader of Europe, and France will be, for several more years, its lieutenant. The way to put France on par with Germany is to reform the French state first and lead Europe afterwards. Addressing simultaneously two objectives that are really sequential can end up making both impossible.

At the end of the 1980s, Margaret Thatcher would not have been able to exercise leadership in the face of the momentous events involving the Soviet Union without the credentials conferred by the success of some of her reforms. Macron should look to that experience as an example to lead him today.