Europe: Don’t Break Out the Champagne Yet

AP Photo/Claude Paris

French presidential candidate Emmanuel Macron delivers a speech during a campaign stop in Marseille. 

The political mainstream on both sides of the Atlantic was hugely relieved when the centrist technocrat Emmanuel Macron topped the right-wing nationalist Marine Le Pen in the first round of voting for the French presidency.

Nearly all center-left and center-right politicians have now endorsed Macron, who is expected to defeat Le Pen in the May 7 runoff by at least 30 points. Polls show Macron winning by about two-to-one.

Bullet dodged, right?

Well, maybe for now. There was the same general relief in the Dutch election of March 15, when the far-right nationalist Geert Wilders received just 13.1 percent, and the center held.

But here’s the problem. The center, as represented by Macron, and by Dutch Prime Minister Mark Rutte, and by German Chancellor Angela Merkel, is committed to austerity policies.

These policies continue to sandbag the European recovery, and to produce increasing support for far-right, ultra-nationalist parties over time. And there is not much of a credible, anti-austerity, democratic-left opposition anywhere in Europe. The democratic left was all but wiped out in the Dutch election and the Labour Party is about to get trounced in the June 8 British general election.

Macron is far from a progressive. As a former investment banker and recently economics minister under President Francois Hollande, Macron was among the more conservative members of the nominally socialist cabinet. To improve France’s sluggish economy, he has promoted more “flexible” labor markets, and more “supply-side” investments in the skills of French workers.

The trouble with these strategies is that in the absence of far more expansionary macro-economic policies, they do little to shift the fundamental trajectory of the French (and European) economy, or the increasing insecurity of French workers. Le Pen, or someone like her, is likely to do better next time.

Macron is touted as someone who gets along well with Angela Merkel. This is not great news either, since Merkel is the prime architect and enforcer of European austerity.

Austerity works for Germany, since the euro is an artificially cheap currency from the German perspective. German economists calculate that if Germany had kept the Deutsch Mark, it would today be valued at something like 40 percent more than the current euro.

Germany’s huge export surplus, now larger than China’s at about 9 percent of GDP, allows Germany to combine domestic austerity (imposed on the rest of Europe) with near full employment for Germany. But not every country can have an export surplus.

Germany under Merkel is the Typhoid Mary of Europe. She stays well, while everyone else sickens.

Germany will also have an election this year, in September. With Merkel’s sagging personal popularity due to her generous policy on immigrants, there is a shot that the opposition Social Democrats under their new and popular leader Martin Schultz could come to power, in a three-party coalition with the Left Party and the Greens.

But Schultz is about as socialist as Macron. If a leftish coalition does come to power, it will be under pressure to show that it is as fiscally responsible as Merkel’s Christian Democrats, with a little tweaking around the edges.

The best case is that under Macron in Paris and possibly Schultz in Berlin, we might get a little relief from Euro-austerity. Alas, that will not be enough to stem the tides of ultra-nationalism.

And the more that neo-fascist parties gain ground in national parliaments, the more center-left and center-right politicians will huddle together and keep Europe on its current, suicidal course.

So, yes, let’s celebrate the fact that while real neo-fascists are governing in Turkey, Hungary, and Poland, they are still far from power in Paris, Berlin, and the Hague. But hold the champagne.

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