Encore M. Macron

The media focuses on identity politics …

Large parts of the western world breathed a sigh of relief that Emmanuel Macron was yesterday re-elected French President, thereby avoiding the prospect of a far-right leader in the form of Marine Le Pen whose Eurosceptic views would have posed a threat to the integrity of the EU. Macron’s victory margin of 59% to 41% was narrower than the 66% to 34% margin achieved five years ago, prompting a lot of media discussion as to why some voters have switched their allegiance to a more radical candidate, but it was still wide enough. Today, the moderates can celebrate that the worst-case geopolitical outcome has been avoided – for now. For my own part, Macron’s victory fulfils the prediction I made at the start of the year that he would be re-elected to the Elysée Palace.

Much of the commentary in the UK reflects the view I expressed five years ago – “a tinge of envy because it represented everything which is lacking from the UK scene.” But like the US and UK in recent years, the defining feature of the electoral debate in France was identity politics – something which is not likely to go away. Having lost two consecutive elections in the final run-off, Le Pen may not be the go-to candidate for French voters dissatisfied with the status quo but there is no room for complacency. Indeed, she may well have polled better had her links with Putin not been quite so close. The fact that large numbers of voters spoiled their ballot papers, reducing the turnout to 63%, suggests that voters were not particularly enthused about either candidate.

… But the economy matters more

One of the problems with identity politics is that it deflects attention from substantial economic issues, and it is the economics which ultimately matters most in the long-run. Macron may be able to consolidate his position over the next five years if he is able to give the French economy a boost from which voters can benefit. Failure to do so may mean that a centrist candidate is presented with a more difficult challenge in 2027. Recall that Macron was elected in 2017 on a promise to "liberate work and the spirit of enterprise." He has certainly attempted to liberalise the economy but as the gilets jaunes protests showed in 2018 there are limits as to how much voters will accept.

On the surface the French economy has performed reasonably well, the pandemic notwithstanding, with the unemployment rate by the end of last year falling to its lowest since 2008 (7.4%). But the figures are not what they appear on the surface, driven in part by a fall in labour participation, whilst the average number of hours worked per week is still 3.5% below pre-pandemic levels. The government has also relaxed labour laws, allowing companies to make lay-offs more easily. As a result, the proportion of workers on temporary or short-term contracts has risen and as of 2020 it stood at 12.3% of total employment. Macron also presided over an end to the wealth tax, replacing it with a fixed one-time levy on capital gains. The upshot appears to have been a rise in income inequality over the past five years. According to a study by the Institute for Public Policies, the top 1% of wealthy individuals enjoyed a 2.8% income gain (after taxes and benefits) whilst the bottom 5% saw incomes fall by 0.5%. Increasing the extent to which the French economy copies these aspects of the Anglo-Saxon economy is not universally popular with voters. They may not wear more of the same policies over the next five years.

In the near-term, the survey evidence suggests that as in other western economies, cost of living issues are at the top of the electorate’s agenda. Macron has already placed curbs on the extent to which domestic energy bills can rise, with the burden falling on the profits of state-owned utilities, whilst some households will receive an energy rebate. However such measures will add to the fiscal burden, whilst plans to reduce carbon emissions which include the construction of new nuclear facilities will further add to the deficit. This comes after the IMF called in January for a plan to gradually tighten the fiscal stance.

All this raises the question as to how Macron intends to pay for his fiscal largesse. His policies are predicated on strong growth but following the downgrade in the latest IMF forecast for GDP growth of 2.9% this year (from 3.5% in the October projection), growth is likely to slow further. In common with nearly all western countries, trend growth in France is set to decelerate with the IMF’s forecast implying a potential growth rate of just 1.3% per year in the medium-term – considerably below the average of 2.1% estimated over the period 1990-2008.

One plan under discussion to free up resources is reform of the pension system with suggestions that the retirement age could be raised from 62 today to 65 by 2031. This will be a hugely contentious policy which will almost certainly result in significant opposition. Towards the end of the election campaign Macron was already backing away from his original position, suggesting a longer transition beyond 2031 and increasing the age only to 64. It is, however, clear that some form of fiscal action will be necessary. According to the IMF’s latest Fiscal Monitor, the French debt-to-GDP ratio is set to edge up to 114% by 2027, putting it significantly behind only the traditionally indebted economies of Italy and Greece amongst EMU countries.

Final thoughts

Macron’s re-election is good news for an EU that is seeking to tighten ties in the response to the military threat posed by Russia and the economic challenge posed by China (and to some extent the US). In many ways he represents the political centre with ambitious plans to modernise the French economy and reinvigorate the EU. But many French presidents have talked about the need for economic reform only to find that their policies were derailed by domestic opposition. Some of Macron’s economic agenda is very radical and we can expect significant pushback from an electorate that is already feeling the squeeze. If he pushes ahead with plans that alienate voters – notably on pension reform – there is no guarantee that a moderate will necessarily win the 2027 election, particularly if the challenger is someone other than Marine Le Pen.

Macronomics

In a recent fascinating interview with The Economist, French President Emmanuel Macron reiterated his long-held view that the EU has to adapt if it is to survive in a much-changed world. As Macron noted, things that were unthinkable five years ago are now the norm and that “if we don’t wake up … there’s a considerable risk that … we will no longer be in control of our destiny.” It is hard to disagree with this: The historically strong relationship between the US and Europe has become less anchored in recent years, initially as a result of Barack Obama’s pivot towards Asia and more lately thanks to Donald Trump’s retreat from rational policymaking. Since the EU is unable to rely on the US to help deal with the rise of China as a world power, whose interests do not chime with those of the EU, Macron believes that European nations have to act proactively in their own interests.

Whilst most European leaders would profoundly disagree with Macron’s assertion that NATO is “brain dead”, at the very least it should act as a rallying call for Europe to think about its place in the world. This week’s NATO summit in London was a chance for western leaders to get together, which is useful in itself, and even though no great decisions were taken it appears to have passed off cordially enough (the ongoing spat between Donald Trump and Justin Trudeau notwithstanding). But although forward-thinking European politicians will have to rethink what kind of Europe they want, there simply are not enough politicians who share Macron’s vision. Germany may be the economic powerhouse, but Angela Merkel is coming to the end of her tenure as Chancellor and her coalition government is more fragile than it was following the election of the Borjans-Esken duo as leaders of the SPD, both of whom are opposed to continuing the coalition with the CDU/CSU. Nor is the German economy currently in great shape as the economic motor splutters in the wake of the US-China trade dispute. The bottom line is that we should not expect Germany to contribute much to reshaping the EU in the next couple of years – like many countries, it is too preoccupied with domestic political issues.

But the problem is more than just political: The EU will have to focus on the kind of economic model it wants to pursue in future. As I pointed out long before the Brexit referendum, the EU has benefitted from the market-oriented model designed to enhance competitiveness which the British have helped to push in Brussels. However, the UK’s departure will significantly change the nature of the EU. For one thing it will change the balance of voting power. Around 80% of EU laws are ratified by qualified majority voting, meaning that they must be passed by 55% of member states representing at least 65% of the total EU population. Germany, the Netherlands, Austria and Finland, together with the UK, currently represent just over 35% of the EU population which gives the northern nations a blocking minority on policy matters. This will change once the UK leaves and concerns have been expressed, particularly in Germany, that countries opposed to market-oriented solutions could press for a weakening of EU competition policy, which has traditionally been dominated by ideas from the northern countries. This in turn would weaken the EU’s economic competitiveness.

Then there is the nature of the economic difficulties facing France which are likely to sap Macron’s energy to pursue EU-wide solutions. The latest wave of public dissatisfaction revolves around reform of state pensions, which has met with huge resistance and a wave of strikes brought the transport sector to a virtual standstill earlier this week. There is no doubt that an overhaul of the state pensions system is required, since it offers very generous state payouts to workers in certain sectors (railways, merchant seamen, energy workers and some niche workers at the likes of the Banque de France and l’Académie Française). Drivers on the Paris Metro, for example, are able to retire at 52 with an average monthly pension of €3500 whereas private sector workers, who retire at 62, receive only €1360 per month. All told, these special provisions cost the taxpayer €8bn per year (around 0.3% of GDP).

We have been here before, of course. A year ago, Macron’s efforts to impose a carbon tax met with huge resistance in the form of the Yellow Vest protests, which prompted him to put the policy on hold. Efforts in 1995 to reform the French economy were abandoned in the face of massive public protest. As the population ages, the state simply cannot afford to underwrite special privileges for any one group but it is a hard sell to get the electorate to understand that a system that has worked for the last 70 years will not fly in the 21^st century. I have a lot of time for Macron’s ideas but I do not believe that he will be successful in delivering domestic reforms on the scale he desires – there is simply too much resistance. This is not to say that he will not be partially successful – after all, things have changed since 1995 – but it may be left to a future generation of politicians to get where he wants to go. 

All this matters because Europe does not have the luxury of time to decide in which direction it wants to go. Indeed, the more I see how slowly reform is proceeding in France and Italy, the more I am convinced that the EU will be forced to concede that not all countries will be able to move forward at the same pace. Ironically this is the form of EU that the British would have been more comfortable with than the push towards a federalist system that grew out of the hubris of the 1990s. But as the world moves towards a world in which the US and China act as the poles of the geopolitical system, Europe cannot simply afford to pick one side. And this is where Macron is right – US and European interests are diverging, and the EU will have to steer its own course. NATO has to stand for more than “No Action, Talk Only”.

Plus ça change ...

Whilst the focus on this sceptred isle has been very much on the shenanigans of Brexit, the rest of the continent is focused on its own troubles. The most prominent issue, which has captured newspaper headlines across the continent, is the wave of public unrest in France where the gilets jaunes have been demonstrating against higher fuel taxes in particular and the rising cost of living in general. 

This reflects concerns expressed around the world that “the system” is not working for the average voter and that more of the same just won’t do. This in turn reflects a complex series of issues which have come together all at the same time to create a Gordian Knot of such complexity that no politician can reasonably be expected to resolve them. Environmental challenges, technological change and a shift in the geopolitical tectonic plates are big enough challenges on their own. Trying to deal with their implications at a time when we are still recovering from the biggest recession in 80 years magnifies their impact.

Looking more closely at the French government’s plan to raise fuel taxes, the French electorate appears to be as concerned as anyone about the problem of global warming and climate change, if opinion polling data are any guide. It is not unreasonable, therefore, for the government to conclude that consumers will appreciate that they have to pay more if they wish to continue emitting greenhouse gases in the process of burning fossil fuel. But they are not having it: Having been squeezed for so long, French voters just see this as another attack on their living standards.

Indeed, this demonstrates the problem of getting consumers to buy into the social changes which will inevitably have to come, and highlights the challenges for policy makers who have to wean the electorate away from certain types of behaviour. This requires an adjustment that people are not prepared to make – at least not now. However, history shows that although democratic societies frequently resist big changes at first, only to subsequently accept they are inevitable, this often occurs only after considerable social unrest, as anyone who lived through the Thatcher era in the UK will attest.

But there is another issue at work in France. Outside observers (such as me) look at the current French situation and realise we have been here before. The reform agenda set out by prime minister Alain Juppé in 1995 met with huge resistance and the general strike it provoked only ended when the retirement reform plan, which amongst other things eliminated the rights of railway workers to retire aged 55, was dropped. These strikes, which were the biggest public demonstrations since 1968, were repeated in 2010 when the government was again forced to modify its plans to reform public pensions. Given this experience, the initial reaction of the Macron government is understandable: Do what previous governments have done and suspend the tax changes in a bid to cool public unrest.

However, Macron has now gone much further than this. He appeared on TV on Monday promising to take the concerns of rural and suburban France more seriously, offering higher payments to pensioners and a rise in the minimum wage, all of which amount to additional outlays around €10bn. Having originally planned a budget deficit of 2.8% of GDP in 2019 – which is higher than the much-contested Italian plan – the budget minister now admits that in the absence of offsetting measures, the deficit will rise to 3.4%.

There are a couple of problems with this strategy. On the one hand, the French government has now done what many of its predecessors have done by kicking the can further down the road rather than engaging in the structural reform that Macron knows is required. This will only invite further protests when the government has to revisit the problems again, but the challenges in future will not get any easier. In addition, it gives cover to Italy’s position and will stiffen its resolve not to back down in the face of the European Commission’s fiscal concerns. Given that the EC has already started excessive deficit procedures against Italy, how does it intend to deal with France?

Against that, we could argue that European countries are once again rediscovering the joys of fiscal policy after years of wearing the hair shirt. But whilst across the euro zone as a whole the cyclically-adjusted budget deficit has averaged 1.3% of GDP over the period 2012-2017 (chart) and Germany has averaged a surplus of 0.5%, France has run a cyclically-adjusted deficit of 3.1% (versus just 1% in Italy). France is certainly less well placed than other EMU countries to provide a fiscal stimulus. 

Another casualty of this policy approach will be Macron’s attempt to move Europe forward. Admittedly his fine words last year were exactly what Europe needed to hear as he attempted to prevent the EU from ossifying as the messy compromise into which it had evolved. But his words did not get a particularly good hearing on the other side of the Rhine. Given the German fixation with keeping deficits down, it is unlikely that his stock in Berlin will have risen.

Whilst there is nothing wrong with judiciously using fiscal policy to nudge the economy forward when circumstances demand, the French – and the Italians – are increasing their fiscal deficits to buy off the electorate. And it may even work for a while - after all it is voters' money. But hard choices sometimes have to be made. I have long argued that the UK has overdone the degree of austerity and I understand why Macron made his choices. But I cannot help feeling that somewhere down the line this might be a policy that backfires.

EU may see it differently

Although the British government was given a bloody nose following last week’s Salzburg summit, events of the past few weeks act as a reminder that Brexit is one of the few issues on which the EU27 is able to present a united front, since almost all the leaders of the larger nations are facing mounting domestic difficulties. 

Nowhere is this more evident than in Germany where Angela Merkel is facing what looks to be a significant fracturing of the political consensus. In summer 2017, the CDU/CSU coalition was running at 39% in the opinion polls with the SPD polling 25% and the AfD 8%. Latest polls put the CDU/CSU at 28%, the SPD at 17% and the AfD at 16%. In the 20 years that the Emnid weekly poll has been running, the share of the CDU/CSU and SPD, which together represent the main German political factions, has never previously fallen below 50%. That the AfD and SPD are running neck-and-neck in the polls is an indication of how things have changed. The fact that the AfD has maintained its polling status even after the riots in Chemnitz is another illustration of that fact.

The ousting this week of a long-term Merkel ally as head of the conservative bloc's parliamentary group is an indication that her domestic opponents have been emboldened by apparent signs of political weakness. With Merkel already one year through her four-year term, and unlikely to stand as Chancellor at the next election, the beginning of the end of her time on the stage is apparently unfolding before us. 

Not that Emmanuel Macron has much to be satisfied with. According to latest polling data, only 28% of French voters are satisfied with his performance – down from 35% in July and compared with 60% in summer 2017. This puts him on a par with Francois Hollande’s polling ratings after a similar period in office, and way behind Nicolas Sarkozy. Macron’s problems are: (a) he does not enjoy as much support as his landslide election win suggested – many voters simply chose him because he was not the right wing Marine Le Pen; (b) he has been unable to deliver on his promise of a domestic political revolution, and (c) promises to cut taxes remain so far unfulfilled (see this BBC article for a closer look at Macron’s woes).

As I have noted previously (here), Italian politics has been in flux since the spring election as the League and Five Star parties continue to share an uneasy alliance. Current negotiations regarding the 2019 budget have been dragging on for weeks, with the technocratic finance minister Giovanni Tria under pressure to increase the budget deficit to accommodate the expensive election promises of the populist coalition government. There are concerns that a deficit in excess of 3% of GDP would be a problem for the European Commission, provoking a row over fiscal policy that would result in another general election next year. Whether or not this materialises is not the point: It is yet another distraction that Italian voters – and indeed the EU as a whole – can do without.

Factor in the ongoing problems between Brussels and the governments in Budapest and Warsaw, and the news that the Sweden’s  centre-left prime minister has been forced out by the centre-right bloc after an inconclusive election earlier this month, and the scale of the political problems facing EU leaders becomes evident.

Thus, when the British newspapers obsess about Brexit as if it were the only game in town, you can be sure that they have it all wrong. The trials and tribulations faced by Angela Merkel over recent months highlight the extent to which the old order is crumbling. When even the German Chancellor faces mounting domestic problems as a result of the EU migration crisis, it is pretty evident that something is wrong. The likes of Italy and Spain feel that they have been left alone to cope with the waves of migrants arriving on the EU’s doorstep whilst countries such as Austria, which are located on the main land route towards Germany, are concerned that migrants should exit their territory as quickly as possible.

Indeed, immigration is the fault line running through European politics. It was one of the key issues in the Brexit campaign – this was, after all the topic which most exercised UKIP under Nigel Farage – and played an important role in Dutch, French and Italian elections over the past 18 months. There is clearly no easy fix. Aside from any irrational prejudices that people may have, the economic issue is what effect will large migration numbers have on public finances, wages and per capita incomes. The UK evidence does not suggest that there has been any significant adverse impact on the economy. Indeed, much of the empirical work conducted over the last decade suggests that immigration has had no significant negative impact on the job prospects of UK natives. The evidence of its impact on productivity is less clear cut but due to the fact that the skill levels of those entering the UK are generally high – notably those coming from the EU – the empirical studies conclude that a 1 percentage point in the migrant share of the working age population raises productivity by anything between 0.4% and 2%.

But this cuts no ice with electorates which believes this all to be fake news. The fact that populists continue to squeeze the political centre is a concern for those politicians looking for traditional European solutions, involving compromise and rationality, to these 21^st century problems. Too many European politicians are fighting their own battles against populists to care too much about what the UK wants. If British politicians want to engage constructively with the EU27, it might help to recognise that the UK is not unique in any way – apart, that is, from being stupid enough to open a Pandora’s Box, in the form of a referendum, that will not easily be closed.

Vive la différence

Watching the acceptance speech by the new French president Emmanuel Macron yesterday, I must confess to a tinge of envy because it represented everything which is lacking from the UK scene. The French electorate decisively rejected the knee-jerk politics of division in favour of a more inclusive EU-friendly alternative whilst at the same time electing a man who, at 39 years old, is the youngest leader since Napoleon Bonaparte in 1799. At least for now, Macron represents hope for a more positive future. His election also breaks the recent trend towards right-wing populism, as represented by his opponent Marine Le Pen.

Here in the UK an election takes place in just over four weeks’ time and the choices on offer are nowhere near as palatable. Theresa May represents a continuation of the dogmatic opposition to the EU, with the prospect of the economy moving closer to the cliff edge that she claims to want to avoid. But the opposition offers no choice at all. Even accepting that Jeremy Corbyn probably does get a bad press from a media which is viscerally opposed to the Labour Party, he increasingly appears an ineffectual leader unable to rally centrist voters to his cause and who presides over a party which has slipped so far to the left as to be unelectable. The French, of course, had just such a candidate in the first round of presidential voting two weeks ago in the form of Jean-Luc Mélenchon and he trailed in fourth with less than 20% of the votes.

Over the weekend, the shadow Chancellor John McDonnell denied being a Marxist but did suggest that “there is a lot to learn from reading Das Kapital.” Whilst recognising the importance of Marx’s tract as a seminal work in the field of political economy, it is fair to say that from an economic viewpoint there is more to disagree than to agree with, but I’ll leave that for others to debate.  However, coming just days after Labour suffered heavy losses in local elections, losing 382 council seats across the country whilst the Conservatives gained 563, it seems that this is a message which the UK electorate does not want to hear. Labour does not have a positive message to sell the voters and with UKIP all but wiped out as a political force, losing 145 of the 146 seats it held, it is difficult to see the Conservatives winning anything other than a landslide victory at the general election scheduled for 8 June.

Quite what the Conservatives’ economic policy will look like is unclear, since it has delayed the publication of its election manifesto until next week. It is likely to maintain a pledge to reduce immigration but will almost certainly not repeat the mistake made in 2015 when it promised not to raise income tax, VAT or national insurance contributions. But as Jagjit Chadha of the National Institute points out, this election should be about more than just Brexit. Answers need to be found to the weakness of UK productivity for only this way will we finally be able to make some progress on the vexed question of stagnating living standards.

Of course, Macron will face all sorts of challenges to get the French economy back on track. Like the UK, fiscal issues will be high on the agenda with Macron planning to reduce the tax burden, including a reduction in the corporate tax rate from 33% to 25%, and to simplify the tax system. At the same time, he has promised to cut public spending to a still-high 52% of GDP (though on the basis of the European Commission’s data this is not exactly a high hurdle). The new president also plans to decentralise the labour market in favour of firm-level rather than collective agreements, and a gradual loosening of the 35 hour working week. As I noted a couple of weeks ago, the extent to whether he gets a mandate to push through his plan will depend on how much support he has in the National Assembly following June elections. He will have his work cut out.

Macron’s victory yesterday took my mind back 20 years to the election of another young left-of-centre politician in the form of Tony Blair. Blair was viewed across Europe as a breath of fresh air following the fractious Conservative government of 1992-97. He promised a third way in politics which involved a bit of state intervention and a lot of market forces, and offered hope to social democrats across the continent. He took over as UK prime minister at a time when the European economy was a lot stronger than it is today and he was obviously economically successful for a long time. But the story of how he came to be reviled by his own party should be a lesson to Macron. Today’s fresh face of optimism can just as easily become yesterday’s man. As former PM David Cameron once taunted Blair in 2005, “You were the future, once.” And now Cameron, too, lies on the scrapheap of history. Nemesis is never far away

Et maintenant?

With the first round of the French presidential election running exactly to script, the markets today breathed a huge sigh of relief. To recap, Emmanuel Macron and Marine Le Pen made it through to the final run-off, polling 24.01% and 21.3% of the votes, respectively, followed by Francois Fillon (20.01%) and Jean-Luc Mélenchon (19.58%). This was pretty close to what the polls had predicted ahead of the election. With the polls suggesting that Macron will win the final runoff by a margin of around 60-40, the markets decided to get their celebrations in early. On the basis that Frexit will not now happen, the CAC40 posted a gain of 210 points today (4.1%) which is a bigger increase than has been mustered year-to-Friday (197 points). They may be overdoing it!

I have said all along that I did not expect Le Pen to make it to the Élysée Palace, and although we have to wait another two weeks for final confirmation, that looks like a pretty good bet. Assuming that is the case, what happens thereafter? Amidst claims that the French political establishment has been overturned, with neither a traditional left-wing nor Gaullist candidate making the final round for the first time since the establishment of the Fifth Republic in 1958, it should not be overlooked that Macron himself is part of the old establishment. He is a graduate of l’École nationale d'administration (ENA) and a former member of the socialist party who served as Economy Minister between 2014 and 2016, where he pushed through a series of business-friendly reforms. He is also a traditional Europhile who believes deeply in the aims and objectives of the EU (although he has denied that the label is an accurate description of his position).

Indeed, he may be further ahead of the Germans in this regard as he has previously stated that he is in favour of a euro zone budget and the issuance of common euro bonds. Macron is also expected to take a fairly conciliatory approach to Greece’s problems. But for all that he is in favour of economic positions currently not in line with those espoused by Germany, there is a strong sense that he will be in a position to strengthen the Franco-German axis and provide impetus to the flagging EU project. That is, of course, so long as he is secure at home. Macron’s En Marche! movement is not a conventional political party – it was only founded last year – and he may not have enough support in the National Assembly to pursue his domestic agenda.

We cannot write off Le Pen just yet, however, and in a bid to rid herself of the stigma associated with the far right politics of Front National, the party founded by her father, she tonight stepped down as head of FN. Writing in Project Syndicate last week, Zaki Laïdi, Professor of International Relations at Sciences Po, wrote “France has not endured such political turmoil since 1958”. A distrust of elites, fear of globalisation, rising economic inequality and a renewed emphasis among voters on national identity leaves France – along with any other European countries – in a very febrile state. Le Pen taps into the anti-establishment Zeitgeist but although much of the commentary on this side of the channel focuses on her promise to hold a referendum on France’s position in the EU, I suspect that even she will not be able to deliver Frexit.

The bigger problem for both candidates is that neither of them really has a magic bullet to offer the voters. Whoever wins the election will have to make some unpopular choices to make up for the fact that reform progress has been delayed for so long. Outgoing President Hollande’s policies did not move the dial forward. His predecessor, Nicolas Sarkozy, was occupied with the fallout of the 2008 crash whilst the Chirac years of 1995-2007 were hampered by his early failures to push through economic reforms in the face of intense political opposition. France is undoubtedly still a major economic and political power, but like an athlete who has been away for too long, the economy is out of shape and struggling to cope with fitter rivals – locally Germany, and further afield from the rise of China.

Like the UK, France is a proud country with a long history, but it is unable to throw its weight around like it once did. Just as the Brits expressed their frustration by voting for Brexit, so the French have opted to overturn the duopoly formed by the socialists and the centre right. On 7 May, the electorate will thus be faced with a stark choice between an outward-looking Macron and an inwardly focused Le Pen. Whilst the polls suggest that French voters will opt for Macron, if he fails to deliver the prosperity and security that they demand of him, Le Pen and her supporters will continue to ratchet up the pressure. The arguments we will hear over the next two weeks will not end on 7 May – not by a long shot.