Europe’s Last Hope

“Who speaks of victory,” the poet Rilke once wrote, “surviving is everything.” I was reminded of these words when Emmanuel Macron won the second round of the French presidential elections. Leaving aside the impact on France herself, if Marine le Pen had prevailed the European Union would have been plunged into a crisis much deeper than that caused by Brexit.

Her stated intention was to take the country out of the EU and certainly out of the eurozone. This would have been a central secession at the heart of the whole European project, wrecking the common currency, ending the Schengen free travel area, and even the common security and defense policy, not to speak of the horrors of having a farright figure in charge of the rump EU’s second-most important country. Business dreaded a crash induced by her protectionist policies. This did not happen. Russia and the “illiberal democrats” grimaced, but almost everybody breathed a sigh of relief. Stocks surged in anticipation after Macron’s victory in the first round. Donald Tusk tweeted after the second round to congratulate the French “for choosing Liberty, Equality, and Fraternity over tyranny of fake news.” Europe has once again survived.

A Chance to Reinvigorate the European Idea

However, the election of Macron means a lot more than that. People sense that unlike the Dutch and Austrian results, his victory does not just buy time for Europe. Rather, his triumph has been hailed as a chance to reinvigorate the whole European idea: to re-animate the Franco-German partnership at its core, to put the euro on a sound footing with the establishment of eurobonds.

There are good grounds for thinking that this is indeed Macron’s intention, because he signaled as much in a remarkable speech given in Berlin at the start of the year. Building on Joschka Fischer’s famous broadside calling for greater European unity fifteen years earlier, Macron set out a plan for establishing a “European sovereignty,” to address the four crises facing Europe.

Macron´s triumph has been hailed as a chance to reinvigorate the whole European idea: to re-animate the Franco-German partnership at its core, to put the euro on a sound footing with the establishment of eurobonds.

The first crisis he identifies as security, such as the Russian assault on Ukraine but also the Middle Eastern conflicts; here he was vague about the answer. The second is the migration crisis, which he proposed to tackle through a more consolidated asylum policy on the one hand and a tighter union defense of the EU’s external borders on the other hand; not much new here.

The third crisis named was the economic one, which he wanted to settle through a common European external trade posture and a new deal for the euro, transcending the moral hazard/transfer union divide; again, familiar stuff and short on detail. He has since amplified his policy somewhat in calling for a eurozone budget for investment, to be approved by the European Parliament and administered by an economics and finance minister for the eurozone.

Much more interesting was his line on the fourth crisis – one of legitimacy and instruments. Macron suggests dealing with this through a series of national democratic conventions mandated to deepen integration in which no state would have a veto on progress. This is new and exciting.

The Risk of Falling at the First Hurdle

The new French president certainly has the standing to start such a conversation. As Brexit looms, many have observed that France’s military power is badly needed to shore up the credibility of the EU’s battered common foreign and defense policy. So Macron could plausibly be the messiah so many have welcomed him as.

That is what worries me. Not that Macron is insincere or lacks resolve. He is clearly a man of quite exceptional caliber. Rather, my anxiety is driven by four principal fears. First, there is the danger he will simply fall at the first hurdle. His new army of candidates could do badly in the upcoming parliamentary elections, depriving him of the instruments of government.

As Brexit looms, many have observed that France’s military power is badly needed to shore up the credibility of the EU’s battered common foreign and defense policy.

He could fail to push changes to the labor laws through in order to make France more competitive as vested interest groups rally against him. More than fifty percent of French economic activity is still linked to the state, a very high figure. The left, which largely rallied to keep out Le Pen, will do him no favors here. Concerted resistance here may not actually bring Macron down, but it may wear him out to the extent that he cannot devote himself to broader European issues. En Marche could simply become a larger but equally ineffectual French Syriza.

Secondly, Macron will be at the mercy of events in France. Another serious terror attack which could be blamed on immigration or the failure to control borders would give Le Pen an opening, and repeated outrages would probably damage his administration beyond repair. Macron would never have been elected if he had not been the anti-Le Pen. However, this means that she stands to gain if he gets into difficulty at home, either on the economic or the security front.

As Sławomir Sierakowski has pointed out, Macron is effectively a pro-EU populist, in the same way as Donald Tusk was in Poland with his Civic Platform, before he was outflanked by PiS. The  failure of his project will thus profoundly damage the pro-European cause in France and lead to a massive loss of morale.

Thirdly, it is by no means a given that Macron will be able to restore equality to the Franco-German relationship and make it the engine of closer European integration. He appeals to the German left, which, as the commentator Wulf Schmiese has remarked, would like him “pure,” but not to the Christian Democrats (CDU), which would prefer him “lite.” Alarm bells are already sounding across the Rhine at the prospect of some kind of eurobond that taxpayers there will have to fund.

German politicians are also nervous about his open attack on their balance of payments surplus, which he says is putting “unsustainable” pressure on the common currency and on the Southern economies. Nor will German business be happy with Macron’s (perfectly reasonable) argument that the euro is effectively an under-valued Deutschmark, favorable to German exports.

Macron Must Establish a Satisfactory Partnership with Merkel

Moreover, Macron may find that progress in Berlin will be tied to accepting a larger number of refugees, which will be domestically difficult and boost Le Pen. Under Hollande, unlike during the “Merkozy” phase under Merkel and Sarkozy, France was very much a junior partner to Germany. It is not clear how easily will Berlin allow the terms of this relationship to be revised, however pressing the “European” arguments. One way or the other, if he does not establish a satisfactory partnership with Frau Merkel soon, he will leave himself open to Le Pen’s jibe during the runoff that whatever the outcome, France would be ruled by a woman: either herself or the German chancellor.

The internal and the external here are closely linked, because Germans, such as the Bavarian Christian-Social Union (CSU) VicePresident Manfred Weber, have been quick to point out that Macron should only raise his voice in Europe “once he has shown himself capable of reforming his own country.” Macron himself readily acknowledges this, saying during the campaign that France could not rely on Germany until it had pushed through the painful structural reforms it had avoided for so long. In other words, the domestic and the European fronts here are linked. Macron cannot make progress in the one without the other. There is a real chicken-and-egg, catch-22 danger here.

Whatever Macron does at inter-governmental level, there is no solution to this problem within the current framework. There is little he can do in the short term about the profound macro-economic imbalances in the eurozone. Putting it crudely and simplifying greatly, Northern economies export high value products while the Southerners sell low value added goods and rely on tourism.

Even before the common currency, the latter depended on domestic demand stimulation through expensive (for them) welfare and subsidy programs. This was aggravated by the availability of cheap credit after they joined the euro. This is well known. What is unknown is how one gets out of the trap with the current transfer arrangements and structural reform programs which have simply served to depress local demand.

Some Problems Faced by Europe Could Get Substantially Worse

Macron may also run into trouble with those European states who object to closer integration. Any democratic convention which does not give them a veto power will alarm countries like Hungary and Poland, where the legitimacy of the EU is already in question. He may be right to ride roughshod over their objections, but the resulting friction should not be underestimated.

Moreover, none of the other problems faced by Europe in general will go away, and some could get substantially worse. Russia is probably the least of Macron’s worries right now, but Putin could step up his interference in French politics, raising the daily costs of action. Macron could find himself daily warding off special Russian-inspired allegations similar to those which broke on the eve of the second round of voting in the presidential election.

Macron may also run into trouble with those European states who object to closer integration. Any democratic convention which does not give them a veto power will alarm countries like Hungary and Poland.

Syria could erupt again, with a fresh wave of refugees heading towards Europe. This would refill the various camps recently disbanded by the French government and put Macron under pressure to suspend Schengen. Greece could explode, and a collapse there could bring down the particularly exposed French banks. This threat of “contagion” is smaller than it was a few years ago, but it still cannot be discounted. France would also suffer if Spain is convulsed in the autumn over Catalonia, as looks likely to be the case.

What Macron Wishes to Achieve Can Be Effected Through a Full Union

The greatest threat to Macron, however, may be an entirely predictable event, namely Brexit. Here Macron’s rhetoric has so far been highly combative. He has spoken, reasonably enough, of maintaining EU unity during the negotiations. Regrettably, Macron has also spoken of Brexit as a “crime,” talked up the British “exit bill,” and urged a “buy European” policy to harm Britain. He has threatened to look again at the Le Touquet agreement governing the control of passports for cross-channel crossings and to lure business from the City to Paris.

This strategy may win him plaudits among the Europeans, but it will be hard to execute. Not only will the French capital struggle to replicate the factors which make London so attractive to the financial sector, there will also be strong opposition on the French left. As for changing the passport regime, the short-term effect of this will be a massive increase in the number of migrants seeking entry to the UK, the vast majority of them surely ending up in Calais or environs. It may be that Macron’s rhetoric on Britain was just that, intended for the election campaign; let us hope so.

Finally, there is the insuperable problem that what Macron wishes to achieve can only be effected through a full political union, which would mean the final end of French sovereignty. Eurobonds cannot work without the backing of a taxpayer base of the entire EU as represented in a panEuropean Parliament. The basic facts here have not changed since the start of the euro crisis. Likewise, there can be no effective security union or a common travel area with a common state. Again, the facts have not changed since the annexation of Crimea. Simply increasing the cooperation is not enough: only full United States of Europe will work. This would be the end of the Republic Macron had been elected to lead. He may wish to go down this road, but would France follow him?

If a mere timeserver had been elected last Sunday, none of this would matter so much, but there are so many hopes attached to the new president that failure may produce a colossal backlash. Some of this will benefit Mélenchon, but most will boost the Front National. If Macron fails, the last hope for Europe will die. Remember the enthusiasm which greeted Obama in 2008. Trump followed Obama. Let us hope that Le Pen does not follow Macron.