Macron should not rush to punish UK
In an interview two years before Emmanuel Macron became president of France’s Fifth Republic, he was asked for his view on what the French people looked for in their leaders. Macron replied there was “always a sense of something missing in French democracy. This absence is the figure of the king, whom I don’t think fundamentally the French people wanted to kill.”
Macron went on to say that since the departure of General de Gaulle, the normalisation of presidential figures “has created an empty seat at the heart of our political life”.
At the time, Macron was economics minister in the Hollande government. His En Marche movement was not walking, let alone marching. Yet he had been working on filling that “sense of something missing” for years.
According to a biography of Macron, the young politician had been eyeing up the Elysee Palace from his early twenties. In The French Exception: Emmanuel Macron, Adam Plowright tells how as a young graduate, Macron paid a courtesy call on Alain Minc, the chairman of Le Monde, who has the smartest black book in Parisian circles. Minc asked Macron where he wanted to be in 30 years. Macron replied: “I’ll be president.” His answer hooked Minc, who soon became one of Macron’s many benefactors behind En Marche.
Macron seduced a big slice of the French population too. Now he has to deliver on his huge gamble to kick-start France’s sluggish economy and create jobs for the 2.65m people without work. This won’t be easy, as talks with the unions are showing, while Macron’s recent state rescue of a shipyard puts him at odds with EU state aid rules.
Yet his bigger dream is restoring France’s role in Europe. Macron wants an EU on steroids: a collective defence
‘Macron believes Brexit removes a teenager from the EU high-table’
capability, the eurozone to have its own budget, eurobonds to mutualise debt (setting him against Germany), and a more aggressive trade policy towards the US and Asia.
Which is why Macron describes himself a “hard Brexiteer”, not because he wants the UK to leave but because a clean break gives France the upper hand. One of his close advisers, quoted anonymously by Plowright, warns that while Macron says he does not wish to punish the UK, there “will be consequences for every sector, particularly for finance. It’s obvious Brexit will have a cost, otherwise belonging to the EU wouldn’t make sense for the other 27 members”. And don’t believe the no punishing.
For Macron, Brexit is a win-win. He believes the UK’S departure removes a stubborn teenager from the Brussels high-table and gives France a chance to bite chunks out of the City. To date, his entreaties have had little effect. The banks that are moving staff out of the City are going to Frankfurt, Dublin or Luxembourg. Even the Germans accept reluctantly that trading in euro-denominated securities is better off in London because its deep markets reduce the cost of capital for EU corporates.
What Plowright does not address is whether Macron has missed the bigger picture with his obsession for EU integration. That instead of poaching business from across the Channel, he should be looking at the Silk Road, which is opening up new trade from China, Russia and Asia Minor to the West. Or, indeed, to Africa, the Commonwealth or South America.
That’s where the future lies. And these are the markets that the City is after, and where financiers already have serious clout. The Chinese and Indian governments list more bonds in London than on all other world exchanges combined: their companies come here to raise capital. Only a few days ago the Chinese revealed plans to launch a new oil futures contract denominated in yuan and convertible into gold, potentially creating the most critical Asian oil benchmark in the world, allowing exporters like Russia and Iran to bypass US sanctions. To make the contract more attractive, China plans the yuan to be fully convertible in gold on the Shanghai and Hong Kong exchanges.
Which is the biggest market outside of China for yuan trading? Well, London has the largest offshore market in the Chinese currency, bigger than Singapore, and works closely with the Shanghai exchange.
Paris doesn’t stand a chance of stealing London’s international business, one that has been built up over decades, if not centuries.
That’s why Macron’s critics claim that if he is to see off a Le Pen victory in 2022 he must not be so myopic, so beholden to Brussels.
Macron is undeniably clever. But is he clever enough? Before winning the election, he also said: “The French people are regicidal monarchists ... They like choosing a king in order to quickly get rid of him.”