We use cookies to help improve and maintain our site. More information.

July 07, 2017

Is Emmanuel Macron just another Matteo Renzi?

We note some eerie parallels between the way Emmanuel Macron is prioritising his reform agenda with that of Matteo Renzi. Renzi also started off with ambitious and comprehensive plans for structural reform, but burned his political capital by focusing his efforts on the constitutional and political reforms rather than on economic reforms. Since Macron's grand speech in Versailles, we now detect the first voices daring to criticise the president and his team. Institutional reforms make sense from within the government, but may not be a priority for the rest of the country. Is Macron a control freak, like Renzi, whose main priority has become to consolidate his own power? We all know where that ended in Italy. Is the reform agenda which brought Macron to power more or less likely to succeed with a technocratic government, total newbies in parliament, and hardly any opposition except for Jean-Luc Mélenchon? 

There are already the first disappointments. Liberalists were underwhelmed by Édouard Philippe's reform roadmap. Too hesitant and too slow, and not worthy of being called a revolution as evoked by Emmanuel Macron, says Gaspard Koenig in Libération. The economist Nicolas Bouzou puts it this way: we go into the right direction, but at 1.5km/hour. Philippe Aghion and Philippe Martin, who helped to design Macron's economic programme, disappeared from the inner circle, as did Jean Pisani-Ferry. The roadmap is a hodgepodge of incremental reforms that any of the two previous governments could have presented. Koenig bemoans the lack of structured ambition, details, or a real project, so this is far from being called a revolution. The major structural reforms - solidarity wealth tax (ISF), capital taxation, and the competitive and employment tax credit (CICE) - were pushed back. The autonomy Macron promised universities on the campaign trail no longer appears in the programme. The same is true of the reform of unemployment insurance. And old patterns still persist, like the €10bn investment fund for new technologies, with the state as strategic investor. Koenig says the fear is that the economists in Macron’s team will be replaced by technocrats and the lack of ambition that goes with that.

The only reform the government remains serious about is labour reform. We see that choosing a prime minister from the the Republicans has helped to win the legislative elections and weaken the opposition, but it may well turn out to be the achilles heel of Macron’s ambition to transform the country.

Show Comments Write a Comment

July 07, 2017

The real obstacles to a Brexit deal

As ever Andrew Duff gives us a reliable guide on where we are in the Brexit process. This is very different from what one would gather from the media, which seems to exist in some parallel universe. We fully agree with Duff that questions about the future of EU citizens are not going to be the big issue. This is now down to technical discussions, of which there are many. As the EU is now accepting that it cannot treat the UK as a third country, it cannot impose the jurisdiction of the ECJ on the UK forever. There will also be a political deal on Ireland. The main issue is funding, or rather finding the correct sequencing. The main obstacle is confusion within the UK about the detailed future relationship. The issue is not whether the UK will be in the single market or not (it has already been decided it won't), but whether the UK wants an FTA that includes participation in specific EU agencies and spending programmes. 

"Full agreement on the matter of money, therefore, is not achievable in Phase I. Good progress can only be made in Phase I if the UK has made up its own mind about its long-term financial engagement with the EU. For the moment, divisions in the Tory cabinet over the longer term relationship seem to be crippling the Treasury’s efforts to respond substantively to the Commission’s negotiating position. So we are left with a conundrum. Irresolution on the British side makes it an unreliable negotiating partner who may not be able to deliver a final deal."

Duff suggests that the EU27 should make an offer that cannot be reasonably refused. The proposal of a Joint Brexit Committee is a good start. The next step should be a broader reflection on how the EU27 wants to deal with its neighbourhood. 

We also noted a very good comment by Alex Massie who writes that the UK, including its so-called pro-Europeans, has never been committed to European integration. 

“...no-one, or almost no-one, ever bothered to make a case for the EU’s enduring value. Even pro-Europeans couched their arguments in miserably transactional terms: the EU isn’t great but it’s a little better than the alternatives. And having spent thirty years squabbling, during which time every treaty negotiation was treated as Britain vs the Rest, we created a political culture in which the default setting or assumption was that, while still better than the alternatives, the EU could never be anything other than intrinsically hostile to British interests. We never saw the nobility of the project because we never talked about it and, perhaps, because if we had, the British people would have laughed at such talk."

Show Comments Write a Comment

July 07, 2017

Why Nordstream 2 should be delayed

Georg Zachmann makes the argument that Germany should drop its support for the Nordstream 2 project, or at least postpone the decision to built it. The two reasons he gives are that it increases Europe’s dependence on Russian gas, and that it isolates Ukraine politically. One of the German arguments in favour of Nordstream 2 is precisely that the EU gas supplies are currently dependent on pipelines that go through Ukraine. Zachmann writes there is no real risk associated with this, especially in view of the benefits Ukraine derives from its close association with the EU, which the country will not put at risk. Nordstream 2 will be seen by Ukraine as a vote of no confidence. The country has reformed its state-owned gas industry, and allowed western companies a foothold in that market. There is now hope that Ukraine can be self-sufficient within a few years. Nordstream 2 would further increase Ukraine’s dependence on Russia.

Show Comments Write a Comment

July 07, 2017

On why the G20 won’t solve the main problem

Dani Rodrik offers some pertinent thoughts on globalisation. He notes that the G20 has its origins in two ideas, one useful, another less so. The good idea is that one needs to include developing and emerging market economies in the discussions on global governance. The less useful idea is that solving the pressing problems of our time requires more global co-ordination. He says the opposite is true. While it is true that climate change does indeed require global co-ordination, this is not true for globalisation:

"But the skewed and unbalanced trade deals ... were not imposed on the US by other countries. They were what powerful US corporate and financial interests – the same ones that support Trump – demanded and managed to obtain. The failure to compensate the losers was not the result of inadequate global cooperation, either; it was a deliberate domestic policy choice.

The same goes for financial regulation, macroeconomic stability or growth-promoting structural reforms. When governments misbehave in these areas, they may produce adverse spillovers for other countries. But it is their own citizens who pay the greatest price. Exhortations at G20 summits will not fix any of these problems. If we want to avoid misguided protectionism, or to benefit from better economic management in general, we need to start by putting our own national houses in order."

Show Comments Write a Comment

This is the public section of the Eurointelligence Professional Briefing, which focuses on the geopolitical aspects of our news coverage. It appears daily at 2pm CET. The full briefing, which appears at 9am CET, is only available to subscribers. Please click here for a free trial, and here for the Eurointelligence home page.


Recent News

  • October 16, 2017
  • What‘s the deep meaning of the elections in Lower Saxony?
  • Can Brexit be revoked?
  • Macron's grand narrative
  • April 19, 2017
  • Shadows of money
  • Breppe Grillo vs Eurointelligence
  • October 20, 2016
  • No games please, we are Europeans
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • September 18, 2017
  • Why Germany cannot lead Europe, let alone the free world
  • Will Macron help to build up Mélenchon?
  • Boris' Coup
  • May 12, 2017
  • What to do with Germany’s tax windfall
  • How Macron counts on building a majority
  • Options for the eurozone
  • January 05, 2017
  • French Socialist primaries - old wine in new bottles
  • Le Pen's hard ecu
  • Will Tusk get a second mandate?
  • Themes of 2017
  • August 30, 2016
  • Brexit facts on the ground
  • Burkinis and Republican primaries
  • The SPD and TTIP
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • January 05, 2018
  • Catalonia's government by Skype
  • The case for EEA membership
  • December 07, 2017
  • Schengen suspended
  • Puigdemont's European arrest warrant withdrawn
  • Another Greek red line crossed
  • What the (failed) agreement on the Northern Irish border tells us
  • November 21, 2017
  • A short note on the impact of German political chaos on Brexit
  • A scandal, overshadowed
  • November 06, 2017
  • Pressures on EU rise over Catalonia
  • German pre-coalition talks hit glitch
  • If you thought UK politics couldn‘t get worse...
  • October 23, 2017
  • Macron's plans for the European Parliament
  • First phase of Brexit negotiations in final stretch
  • Why the left hates Europe
  • October 10, 2017
  • The UK is slowly gearing up for a no-deal Brexit scenario
  • No liberal parties in Austria
  • September 29, 2017
  • Is the CDU about to rebel against Merkel?
  • What about defence?
  • What happened to the French mainstream parties?
  • September 18, 2017
  • Why Germany cannot lead Europe, let alone the free world
  • Will Macron help to build up Mélenchon?
  • Boris' Coup
  • September 07, 2017
  • Northern Ireland and Brexit - a diplomatic nightmare
  • Can Macron succeed where Balladur failed?
  • ECJ upholds relocation of asylum seekers
  • August 29, 2017
  • The deep significance of Labour's Brexit U-turn
  • The day after the SPD loses
  • August 21, 2017
  • Soft, getting softer
  • Tsipras' chances of a boost
  • On the fallacy of a middle-ground option for the eurozone
  • July 31, 2017
  • Russia sanctions bill becomes US law
  • Spain's Guardia Civil in the eye of the Catalan storm
  • A grand bargain between France and Germany
  • July 24, 2017
  • Macron's popularity falls amid more budget cuts
  • Orbán to support Polish government against EU
  • No exit from Brexit
  • July 17, 2017
  • What Tony Blair's Brexit confusion tells us
  • Schulz advocates compulsory investments
  • Italy’s government has effectively lost its majority
  • July 14, 2017
  • We are entering the technical phase of Brexit
  • Don’t be too complacent about the EU
  • July 12, 2017
  • And now for the real Brexit talks
  • July 10, 2017
  • EU in self-destruction mode
  • The EU's fault lines
  • Fake News and Fake views
  • July 07, 2017
  • Is Emmanuel Macron just another Matteo Renzi?
  • The real obstacles to a Brexit deal
  • Why Nordstream 2 should be delayed
  • On why the G20 won’t solve the main problem