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

November 20, 2018

0

Why Ghosn, fallen star of the car industry, matters politically

The car industry faces yet another scandal with the arrest of Carlos Ghosn, the larger-than-life head of the Nissan-Renault alliance. He faces various allegations of improper behaviour, including under-reporting of his income to the Japanese financial authority. This came as a total surprise to the industry and to observers. The now-likely removal from his leadership positions also puts into question the Nissan-Renault alliance itself. The arrest will not only shake the industry but also ripple through the French political debate. The French state is a major stakeholder in Renault, and Emmanuel Macron was quick to point out that they will watch the situation closely. But there is also a more indirect political effect: Macron is currently faced with a grassroots movement that is ready to bring its frustrations out onto the streets in their yellow traffic vests, and this affair might further strengthen their outrage. 

The BBC reported last night that Ghosn’s income under-reporting is not a matter of tax evasion. But the media coverage of the case in France is showing a detailed interest in the salary and conduct of Ghosn, and in his closeness to Macron. Even if the allegations eventually lead to nothing, Ghosn's fall from grace risks antagonising the less well-off against the elites, as well as the French regions against the globalised world. Many tweets noted that Macron had no words for the fuel tax protesters but immediately reacted to the Ghosn arrest. It provides new munition for the protesters, some of whom already vowed to continue their road-block demonstrations. About 27,000 went to the streets on Monday, and there is already an online count of about 20,000 for this coming Saturday. Businesses are starting to raise concerns that, if the protests continues, the the economy will be affected. 

Politically this is a tricky territory for Macron to navigate through safely. He has no clear partner to get out of this stand-off with the protesters, as neither the trade unions nor the mayors will come to his rescue. This risks isolating the president even more, notes Cécile Cornudet. How can he respond to a movement without an identified interlocutor, organisational structure or order? Macron's strength was once that he crushed the intermediary institutions to get his reforms through and to stay clear of conformism. Now it seems to become his weakness.

Our other stories

We also have stories on how the Diesel scandal is driving voters away from the German grand coalition; on Deutsche Bank's role in Danske Bank's Estonian money laundering scandal; on the Eurogroup's reaction to the Franco-German eurozone budget proposal; on Andrea Enria's ideas on bank supervisory transparency; and on Theresa May's domestic victories and setbacks.

Eurointelligence Professional Edition

For premium access, please log in or register 
for a free 3 day trial access to the Eurointelligence Professional edition. The best independent intelligence on the eurozone in a fast and easy to read format.

We have a publicly available short version of Eurointelligence Professional Briefing, which focuses on the geopolitical aspects of our news coverage. It appears daily at 2pm CET.  It only covers a portion of the full briefing, which appears at 9am CET, and is only which is available only to subscribers.

A message from Wolfgang Münchau

Welcome to the eurointelligence.com homepage.

Since 2006 we have been providing our readers from central banks, European and international institutions and the financial sector with our daily morning newsbriefing, each morning, at 9am CET, Mondays to Fridays. We are independent from governments and institutions, so you get our honest, sharp and frequently humorous take on the news and the debate. The subjects we are currently focusing on are all the issues relevant to the eurozone - the discussion about Greece, the lacklustre economic recovery in the eurozone, but also external influences, like the discussion on Britain's future in the EU and the EU relations with Russia. 
Many people were surprised by the re-emergence of the eurozone crisis. Eurointelligence readers would not have been. We have given our readers an honest assessment of what and what has not been resolved, at a level of a detail that has no match in the published media. Eurointelligence is the place to go to keep ahead of events in the eurozone.
I would like to invite you to register for a free 3-day trial, without commitment, so you can judge for yourself.

Wolfgang Münchau
Director Eurointelligence