Emmanuel Macron pitched himself as a bulwark against the rise of the far right in France when he burst onto the highest political stage and became president in 2017.
The leader of the European Union’s second-biggest economy has instead ushered in a period where far-right leader Marine Le Pen is not only the chief power broker in Paris, she’s closer than ever to the ultimate prize: the Elysee Palace.
Macron’s grand plans are now stuck in a cul-de-sac of chaotic failure after she allied with other parties on Wednesday to topple Prime Minister Michel Barnier. He was appointed just three months ago by Macron to lead a minority government and keep the project alive.
France now has no fully-empowered government — and no obvious way to form a stable one for months — the public is frustrated, and there’s a growing budget crisis. Investors have driven up risk premiums on French assets over peers to levels not seen in more than a decade and sent stocks plunging. The benchmark equity index is on track for its worst year relative to Europe’s Stoxx 600 since 2010.
Macron’s loosening grip on his agenda and Le Pen’s ascent mark the apex of a years-long battle between two visions of France and the European Union.
For the country, it heralds a shift away from years of business-friendly policies that transformed its image, helping lure global finance to Paris after Brexit and bring in foreign money to spur an industrial revival. But those policies angered ordinary workers, who’ve steadily been won over by Le Pen’s promises to do more for them.
The uncertainty over France’s direction couldn’t come at a worse time for the EU, with the Russian army threatening its threadbare defenses, its companies outgunned by the financial muscle of American and Chinese competitors, and the prospect of a hostile US president about to return to the White House.
When it comes to the bloc’s future, Macron has closely echoed the prescriptions of former European Central Bank President Mario Draghi, who warned in a landmark report this year of an existential threat without massive investment and greater integration.
Le Pen casts herself as the antithesis to that approach, slamming the powers of Brussels and vowing to withdraw France’s funding and push back against federalism. She has her own likeminded allies in Hungary’s Viktor Orban and Italy’s Giorgia Meloni.
On the eve of Macron’s election in 2017, Berenberg chief economist Holger Schmieding predicted a “golden decade” ahead for France. The prediction held for years, he says, but now looks to have come unstuck.
“The golden times are over and the extent to which France falls back depends in the short term on fiscal uncertainty, and in the longer on whether it really backtracks significantly on Macron reforms,” he said. “The risks have risen significantly.”
The president is due to make a statement at 8 p.m. Thursday.
Hard Sell
Macron took power at just 39 years old, crushing France’s moribund political parties in his path with plans to shake up the system and free the economy of strictures. He promised that any short-term pain from lost entitlements would deliver long-term benefits for voters.
But it was a hard sell, and Le Pen capitalized on every misstep. She relentlessly built her support as more and more voters shunned what they saw as an out-of-touch elite thriving as they struggled day-to-day.
Le Pen now controls the largest party in the lower house after snap elections in June, and her allies are pushing for the next unprecedented step – making Macron the fall guy in the aftermath of the parliamentary showdown, potentially cornering him into stepping down.
“He has blocked the country and only he can unblock it,” said Louis Aliot, vice president of Le Pen’s National Rally. “Resignation is the only option left.”
The president, whose term runs to 2027, can’t be forced to resign. Le Pen on Wednesday refrained from demanding that, saying it’s up to Macron and his conscience to decide.
But she’s potentially up against the clock. Prosecutors in an embezzlement trial are asking for her to be barred from running for office with immediate effect. The verdict and sentencing will come on March 31.
“Le Pen wants to shift the attention away from her trial,” said Eleonore Caroit, a lawmaker from Macron’s group. “Her goal is to fuel confusion and instability to try to push Macron to resign.”
Speaking on TF1 television after the vote, Le Pen said the idea that the trial is dictating her moves is “pretty mediocre.”
Deadlocked Position
The next weeks, if not months, will be a challenge for whomever Macron appoints to succeed Barnier as they will face the same urgency to adopt a budget with no majority.
There’s no possibility of calling legislative elections until July — a year after the last ballot — so the same parliamentary deadlock will apply.
The National Assembly, which has the final say on any bill, is split between three irreconcilable blocs: a shrunken center backing Macron, a leftist alliance, and Le Pen’s far-right group.
“He is no longer the master of the game,” political historian Jean Garrigues says of Macron. “The almighty president he once was is gone and will never come back.”
There’s no time limit to name a new premier, but the French leader will be under pressure to move fast, as the country desperately needs a budget to rein in the deficit and reassure investors.
Barnier’s core mission was to deliver €60 billion ($63 billion) of tax increases and spending cuts. The outgoing administration will likely propose emergency legislation to allow the state to collect taxes and conduct the minimum level of spending to avoid a shutdown.
French equities rose Thursday, with analysts citing optimism that proposed tax hikes as part of Barnier’s fiscal plans may not happen.
Macron’s Missteps
Macron’s tussle with Le Pen over France’s economic and political future began with a near knockout blow in 2017 during a now infamous presidential debate when he exposed her ill-thought-out plan to rip France from the euro. Scared voters handed him a large victory at the polls and a huge majority at the ensuing legislative elections.
But Macron made an early miscalculation as president by raising duties on gasoline, while also slashing taxes on business and capital, and stripping back protections for workers. The faith in policy theory and inattention to the impact on working people earned him the moniker of “president of the rich” and sparked the Yellow Vest protests in late 2018.
It gave Le Pen a way back and a clearer constituency that she has since leaned on to burnish her credentials as a defender of ordinary people against the image of an imperious president.
Macron fought off Le Pen’s presidential challenge in 2022, yet a plan to raise the retirement age — considered sacrosanct in France — proved another misstep. It fueled yet more mistrust of government for Le Pen to tap.
In June this year, Macron made the ill-fated decision that precipitated his decline — calling a snap election in a bid to regain control after Le Pen’s party stormed to victory in EU elections.
Le Pen campaigned as an advocate for struggling households fatigued by the biggest inflation surge in a generation, pledging to roll back Macron’s pension reform and slash taxes for consumers. Macron’s centrist-alliance shrank as the National Rally became the single largest party in the lower house.
It was a “political miscalculation,” said Mujtaba Rahman, managing director for Europe at Eurasia Group.
“He did it quickly, by stealth and took all political actors including many of his own allies by surprise,” he said. “There wasn’t a lot of goodwill for Macron but he squandered any residual goodwill with that decision.”
