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In French, President Emmanuel Macron, a confident establishment leader, is under siege from a populist right, a movement he calls a shocking disorder in the country, a.
Disorder jiju kieta.
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And just last week he scheduled a surprise vote to settle domestic problems, a decision he called serious and heavy.
So this is young Lord anacto.
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Macron's unexpected move to dissolve the country's parliament and call snap elections is giving European officials flashbacks to Brexit.
We are approaching one of the biggest decisions this country will face in our lifetimes, whether to remain in a reformed European Union or to leave.
You might remember that vote was triggered by former UK Prime Minister David Cameron, who called for and lost a referendum on membership in the European Union back in twenty sixteen.
Three years ago, I committed to the British people that I would renegotiate our position in the European Union and hold an inout referendum. Now I am delivering on that commitment. You will decide and whatever your decision, I will do my best to deliver it.
Now summer wondering if Macron has made the same mistake.
There is now a whole vision of a kind of Brexit style crisis that will plunge France into kind of gridlock and take a long while to sort out.
Leonel Laurent is a Paris based columnist for Bloomberg Opinion. He's been following the past week's tumult in France and across Europe.
So really everybody was expecting twenty twenty seven, the next presidential election, to be the big next timeline, but what happened was European elections came in between.
This was supposed to be a relatively boring election for members of the EU Parliament, but the result was not boring. Marine Le Penn's right wing National Rally Party got more than thirty percent of the vote and gained twelve seats, and that led Macron to call for a snap election.
And since then it's been absolute chaos. We had the incredible sight of the head of the Century Party announcing an alliance with the far right with main Penn junaios Estan nu Men, only for his own rank and file to turn up at his office and demand he leaves and be physically turfed out of the party, while he barricaded himself behind the door and refused to come out.
And France wasn't the only country to be rocked by the results. In Germany, the far right also made shocking gains. The Alternative for Germany Party, also known as the AfD, won sixteen percent of the vote, more than German Chancellor Olaf Schultz's Social Democrats. I'm David Gerret and today on the big take, why Europe is shifting to the right and what that means for everything from the war in
Ukraine to the US presidential election. It seems astonishing given all that's happened in recent days, But it was just a few weeks ago that Bloomberg editor in chief John Micklethwaite sat down with French President Emmanuel Macron, and during that conversation, Macron touted all he'd done to transform France's economy since he was first elected in twenty seventeen.
We delivered a lot of reform. Since the very beginning twenty seventeen, tax cuts fled, tax on capital gains. We decreased from thirty three point three to twenty five percent copport taxes with inflation war In Ukraine, we passed reform and on pension scheme and unemployment mechanisms. I don't see a lot of countries around us having done so.
So you don't just want to be compared to Europe to you, no, no.
No, My point is just to say we delivered, we do deliver, and we will deliver.
Now that economic success story is in danger of being overshadowed by Macron's political gamble. I asked Bloomberg opinion columnist Lionel Laurent just what had changed. So the last time we spoke was about a month ago. It was right before our editor in chief sat down with the French president Manuel Macron, and in that interview it all seemed pretty rosy. What has happened in the last month.
So I would liken it to if you're playing a board game and you're losing, and instead of playing it through to the end, you flip the table and fit
the board and see what happens. He's decided that instead of waiting till twenty twenty seven for the presidential election, instead of fighting the long difficult fight to win voters back, he's decided just to simply accelerate the whole process and if the French vote against him, Let's say, if he loses the election, then there'll be two years of chaos and gridlock that will somehow hurt the Penn's chances of becoming president, or he wins, in which case he can
say I did the ultimate gamble and I won't.
It doesn't seem like so far investors have appreciated that gamble. Last week there was a sharp sell off that saw the value of French stocks fall by more than a quarter trillion dollars. That's led Paris to lose its spot as Europe's biggest equity market to London less than two years after winning that title.
I think the risks that markets are waking up to now isn't that it's a choice between mac Horn the Penn. It's that actually the choice for the French when it comes to voting will be between a block that includes the far right and a block that includes the far left.
French voters are set to head to the polls on June thirtieth, and there will be a second round of voting on July seventh. According to the latest polling Lepen's National Rally party is in first place, on track to win nearly a third of the vote in Macron's Party Trail's National Rally and the left wing New Popular Front.
Either of those two blocks would potentially want to roll back the suite of economic reforms Macron has pushed through since he's been in power, and it certainly would jeopardize other policy priorities, including pension reform. Len Now, how much of a surprise was this for you, somebody who follows European politics closely, that you had the success that these parties had in this recent European election.
I think with the European election it was pretty predictable. I think with France you still have trouble explaining what's going on. Even someone who's living right up, pressed up against the window, who's seen La penn progress and progress and progress and progress, it is still very hard to explain what's going on. There are so many slices to this right. There is a sort of disconnect, let's say, in France, between Paris and the rest of the country.
That disconnect helps explain the success of the far right. According to Lionelle, it seems that in France, like in the United States. No matter how positive the economic data may be, the economic vibes are bad.
If you look at how well off people are I mean France, think about France's social model, Think about the money thrown at the French during COVID, think about during the inflation shock, France was doing everything it could to basically protect consumers from price increases. It still doesn't seem to have worked, it doesn't seem to have sunk in. People still feel like they are worse off and they
won't change. It's almost like the entire system is set up to have the French end up disgusted and fed up with the people in power.
Even still, Leonelle says, there is no single explanation.
I still struggle with to really explain simply why Lapen is where she is in terms of the numbers.
This campaign ahead of the snap election is set to last for just a few weeks, so we.
Have a campaign that is very short compressed, Yes, is very compressed, and so what that fundamentally means, and this is also part of the gamble, It's that there really isn't going to be much time to really clarify and get into policy, and that's been the kind of strength and the potential weakness of a politician like my In a penent, no one knows what she stands for. It is almost content free. So the idea was to simply say, well,
let's see what happens. Meanwhile, of course financial markets are taking fright. That might cause a different reaction, but for now the tactic really has been try and find alliances, stay firm and see what happens.
Coming up after the break. The reasons Europe is shifting right word and what that could mean for centrists not just on the continent but around the world. The results of last week's EU elections didn't just see more of France's seats go to far right politicians. Far right parties in Italy, the Netherlands and Spain also saw notable gains.
And then there were those Germany results, which saw the worst showing ever for German Chancellor Oloff Schultz's Social Democrats, But unlike Macrn, Schultz dismissed demands to call a snap election. Bloomberg opinion columnist Lionel Laurentz says that didn't mean the electoral outcome there was any less shocking.
For Germany to have a far right party scoring well, even if it's not top. For me, it's just kind of incredible. I really didn't think we'd be in this situation, but we are. And also to have this party will have rough edges still say things like, oh, well, maybe not everybody who wore an SS uniform was all that bad. Maybe we should deport certain people from the country. This is all kind of nuts. Now. I do not think
anybody would rate the current German coalition highly. They did very poorly in the election, but they're probably thinking, well, why would we do a snap election because we get wiped out, So that's a bit of logic coming there.
Part of the difference in tactics between Schultz and Macron has to do with how each leader came to power.
I mean, Maccun's whole legacy was originated by a gamble right to come out of the left and create a new party and make France a three party system, which just hadn't been for years. So I think definitely maybe there's a difference in political culture, difference in political calculation. But also I think simply that it is true that Le penn is a much more immediate threat than the IFD is in Germany, but maybe it's a question of time.
Marie Le Penn says she wouldn't call for Macron to step down if her party wins the snap election and the twenty eight year old Jordan Bardella becomes prime minister, But as Lionelle says, it's still pretty hard to say just what her party's policy priorities would be and how the National Rally would govern. Another far right leader who's floated as perhaps a model is Georgia Maloney, the current
Prime Minister of Italy. In those EU Parliament elections, her party won almost thirty percent of the vote.
She's seen as someone who's focusing a lot on conservative and Catholic values, whether you agree with it or not, but she picks her battles. She does not go to the financial market. She does not go to Brussels and say I'm willing to revolt against all of your rules, and if the market doesn't like it, they can sell
my bonds and turn against me. So the optimistic view from some people, which I don't entirely share, is the idea that Le Penn her empty vesselness is an because quickly she will realize she cannot do any of these things, and the idea is that basically she'll come into power somehow markets will mold her, the deep state will mold her, CEOs will mold her, and she'll become an acceptable face. But we don't know.
But even if markets do offer some checks against policies, let's not forget the disastrously short tenure of former UK Prime Minister Liz Truss, there is still this sense that, no matter what, what used to seem radical across Europe has now become mainstream, that overall, the rise of the far right has led many countries, from France to Germany to Spain to adopt policies that once seemed confined to the fringes.
Clearly, there is something in the current state of democracy where there is a hunger for more authority, more executive power, more better, faster, closer to those as less technocratic, more identif debased, more hawkish against imtegration, and more economically let's say, protectionists.
I asked Leonelle, why all of this is coming to a head now.
Well, we've gone through a pretty major crisis. We went through COVID where we realize that actually, not only are we vulnerable to this kind of pandemic, but also governments are able to go to very great lengths to control pandemics and then control the economy. It's huge. And then with the war in Ukraine we had an inflation shock and energy shock, which people find unbearable, even though you could argue it's worth sacrifice and it was well managed.
Clearly people feel vulnerable, and I think that that has changed everyone's outlook on the way the European model works.
And of course it's not just in Europe where we've seen a shift to the right. What do you think the lesson of all of this is for those of us who are watching this unfold in the US are in the middle of a campaign presidential election just a few months away, how would you counsel us to interpret what we're seeing in France, in Germany and maybe on the continent were broadly.
Well, firstly, that there are global similarities. I think Trump and Brexit were the kind of beginnings of what we're seeing today. I do think the economy has something to play. I think people have been quick to assume that it can't be economically related because countries that are prosperous are
still having a kind of rebellious moment. But I would say in Europe especially, we have gone down a road of a certain type of fiscal policy, certain type of monetary policy that is basically built around export competitiveness, keeping wages down low, managing the cost the cost of labor inside so you can export goods around the world. Today, I think in Europe we're seeing that more or completely has become bankrupt. Now. The hope, and this is where
the US should come in. The hope is that the US can help europe right, can kind of guide it down a more independent path, a path that is not just a kind of giant protectorate that just is there to trade with and that's it. So regarding transnatic relations, I hope the US can be a positive influence. But I do feel that in the European world, the economic model has had a lot to answer for.
After those European elections, EU commissioned President Ersula vander Lyon addressed the gains made by far right political parties across Europe.
The center is bolding, but it is also true that the extremes on the left and on the right have gained support, and this is why the result comes with great responsibility for the parties.
In the center.
Is that wishful thinking? How much strain is it under?
I think for someone like vonder Lyon and I think there is the let's say it is it is faith and belief that the center right, the center right can tame and control the extremes. So this, I think is that is the kind of confidence, let's say, from someone like vonder lyin and who knows it might hold that We have a lot of examples that show that it might not hold.
Rist cementno vivai public viv France.
That's it for The Big Take. I'm David Gerre. This episode was produced by Adriana Tapia, Jessicaebec, and Thomas lou It was edited by Aaron Edwards and Ben Sills. It was fact checked by David Fox. It was mixed by Blake Maples. Our senior producers are Kim Gilson and Naomi Shaven and our senior editor is Elizabeth Ponzo. Nicall Beemster bor is. Our executive producer Sage Bauman is Head of podcasts. Thanks so much for listening. Please follow and review The
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