France

The challenges France is facing are not new. However, the collapse of the party system following the 2017 presidential election and the political earthquake triggered by Macron opened radically new perspectives. In spite of the considerable amount of change over the past five years, the country’s key challenges remain largely unresolved.

Macron knew that only a strong and successful French reform agenda would give him the credibility to convince his EU partners and to recover influence on the global scene. The president enjoyed a strong majority in the National Assembly, and the institutions of the Fifth Republic have offered effective instruments for achieving deep reform. The problems lie elsewhere: how to convince a reluctant and volatile public that the new government is making the right policy choices? Given the absence of a strong political opposition capable of proposing credible alternatives, social protest is the main obstacle that the government has to overcome. Social mobilization led by trade unions or political parties in protest to the new government policies are rather symbolic most of the time, but sudden outbursts have the ability to mobilize public opinion, making a given reform unfeasible.

Looking ahead, France has to tackle five major challenges.

The first is political. The entire party system was in pieces after the 2017 political earthquake. While this destructive phase has permitted Macron to sweep away the old political forces to the advantage of his new movement, it has also contributed to the weakening of the traditional mediatory institutions, which will have to be rebuilt. This is also true for the president’s movement, La République en Marche, which has been unable to transform itself into a party capable of fulfilling a mediatory role, and has been unable to establish roots at the local level. Over the past five years, the situation has not improved. Indeed, the contrary is true: The Macron centrist movement is less appealing, the leftist parties are weaker and more divided than ever, while the extreme right movements are flourishing. As for the National Rally, whose ambition was to appear as more responsible and moderate, it now has to compete with a newcomer, Éric Zemmour, whose radical rhetoric is based upon the “French decline” and the invasion of migrants.

The second challenge is financial, budgetary and economic. The diagnosis is well-known. The main change is that the situation has become worse; public deficits and debt have skyrocketed, partly for reasons related to the consequences of the Yellow Vest movement, and partly because of the costly rescue measures designed to overcome the destructive effects of the pandemic. The task is daunting, and no real progress has yet been achieved except in the area of employment. The structural deficit has increased, and budget deficits over the next years will be high, driven by increased public expenditure. Public debt levels have further increased, pushing the total debt to 120% of GDP. However, Macron remains committed to an ambitious reform agenda that might require even more resources to make changes socially acceptable. Education, innovation, industrial reconstruction and the green transition are some of the many sectors where huge investments will be necessary in order to achieve more substantial benefits in the future. This may imply greater EU involvement. In this context, France is supporting crucial changes in the EU governance and policy framework (such as the Stability and Growth pact, the Banking Union and the carbon tax) that would create a more accommodating frame for national fiscal policies.

The third challenge is related to the overall structure of the bureaucracy and the public sector. To date, most of the big reforms have failed; only piecemeal and ad hoc solutions have worked (for instance the digitalization of public services, with a mix of successes and drawbacks). Trimming redundant or inefficient administrations, revising policies that benefit vested interests, and simplifying the complex multilayered territorial system (“millefeuille”) are necessary reforms. However, these reforms have encountered fierce resistance from local authorities, which have not fully accepted the replacement of their autonomous local taxes with transfers from the national tax income, for instance by giving them a portion of VAT revenues. On the one hand, local administrative systems are too costly, too complex and need ambitious reforms whose effects might be felt only in the long term. On the other hand, the central administration needs the support of local governments, who are responsible for two-thirds of public investment. All governments without exception have failed to impose a drastic local government reform, due in particular to the obstruction of the Senate. The result has been an ever more complex set of layers with no hierarchy between them, since this was declared unconstitutional by the Constitutional Council.

A fourth major challenge concerns the intertwined issues of security, immigration and integration. The traditional French model, based on an open policy toward immigrants acquiring French nationality and on the principle of equality of all citizens regardless of ethnic origin or religion, has lost its integrative power over the last 30 years. The established instruments of the integration process (education, work, religion, political parties and trade unions) are no longer effective and have been negatively affected by recent terrorist attacks. This challenge requires multifaceted policy solutions in areas including security, urban development, education and job training, with a primary focus on employment opportunities for the most marginalized citizens. What is at stake is the country’s political and social cohesion, along with common national values and rules. The present situation is characterized by an identity crisis, an ethnic divide, the exclusion of migrants and political frustrations, a mix that has benefited extremist political candidates and parties. Unfortunately, the terms of the debate have been defined by the extreme right, and there has been little chance to build up consensus on this divisive issue.

A fifth challenge has come to the fore in the form of climate change. It is becoming increasingly pressing, to the point that 30% of the funding provided by the EU Recovery Fund will be allocated for investments tackling this issue. The situation in this area is paradoxical. On the one hand, there is growing pressure in favor of drastic public action addressing climate change, while on the other, the primary governmental measure used to address the issue (the increase of taxes on fossil-fuel-based energy in order to limit consumption) triggered the Yellow Vest revolt. Another paradoxical point is the reemergence of the nuclear-power option favored by most parties and a large share of the public opinion (52%), contrary to conditions in most neighboring countries.

France needs courageous policies that include clear (even if unpopular) choices, frankness when explaining the challenges, more social dialogue, and a more streamlined and coordinated style of governance. The good news is that Macron as president is fully and explicitly committed to this reform agenda. The bad news is that his top-down method, together with his more or less open contempt for political parties, trade unions and business organizations, has proved a key obstacle in generating the necessary public support for change.

The French party system has a long tradition of polarization. From the French revolution on, the divide between left and right has been a constant feature of French politics, and has been fueled and accentuated by the major political and social events of the past two centuries. Revolutions, revolts, social movements, wars, the relationship between state and church, and tensions between the center and periphery have contributed to the rather polarized and antagonistic political and social structure of the country. Attempts to develop centripetal forces that collaborate rather than fight one another have sometimes succeeded, but on the whole consensual collaboration has been the exception rather than the rule. Consensus-building has occurred in some particular circumstances (e.g., during wars) or on rare occasions, although, behind the scenes, more collaboration could often have taken place. The Fifth Republic has further accentuated the phenomenon since the institutions, the electoral system and the rules of the game were designed with the aim of accentuating polarization. This polarization has been a major obstacle to policymaking, as no political trans-partisan “reform coalition” or consensus concerning structural reforms could be formed.

Things have changed following the last presidential election, since the new president has managed to form a coalition with elements from the center-right and center-left, pushing the remaining parties to the extremes of the political spectrum. It remains to be seen if this is a short-term accident or the beginning of a new cycle based on a different set of cleavages (e.g., “people vs. elites,” or “European openness vs. national regression”). For the time being, the president’s movement, La République en Marche (REM), built upon the idea of overcoming the sterile left-right polarization for the benefit of more consensual progressive policymaking, has not proven that it has the capacity to change the game.

Macron’s strategy has increased polarization between his movement and the extreme right, marginalizing all other parties and forcing moderates to rally around his flag. This might help to win the next presidential election, but risks to increase the representativeness gap between the political class in power and the population.

Another factor is the persisting fragmentation of the left, divided between the “governmental” and the radical left, and still another part having moved to the Green movement. Finally, a striking trend is the shift of the entire political spectrum to the right and the further radicalization of the extreme right. The attempt by Marine Le Pen to appear as more moderate in order to secure her victory has had an unexpected effect: the rise of an outsider, Éric Zemmour, a media polemist who advocates a more radical stance and has led the fight against “the French decline and the invasion of migrants.” It remains to be seen whether the conservative party (Les Républicains) will be able to overcome its internal cleavages and rebuild a democratic conservative alternative to President Macron. (Score: 6)