Tuesday, June 6, 2017

The Centrist Revolution Now Occurring in France

With President Trump providing all of us a bright shiny object to focus on each day, some pretty profound developments in the world are not getting the attention they deserve.  Probably the biggest story here is fact that French President Macron's centrist party is about to take the largest majority in the French Assembly since the days of Charles DeGaulle.  To get a sense of the magnitude of what is occurring in France, imagine the shock if Tim Geithner had formed a brand new party that not only elected him to the Presidency, but elected massive super-majorities in the House and Senate.  That is pretty much what is occurring in France  today.

Here is some background.  Politicians in France have been talking about major reform of France's rigid labor laws for years.  In the past 12 years, France has seen both parties of the Right and Left fail to achieve any meaningful reform.  The result has been rising unemployment (particularly among younger workers).  Part of the problem in both cases is that because both parties largely ignored these reform ideas in their campaigns (fearing that they were unpopular), neither party had a mandate for change.

Macron is different.  He has centered his movement on two main objectives: reform of France's labor laws, and a reform of how the European Union operates.  When he announced his candidacy for President under a brand new party, conventional wisdom was that he would be lucky to get out of single digits.  Of course, he won the Presidency in a landslide. Once he won the Presidency, the conventional wisdom was that Macron would not be able to achieve his goals because his new party could not possibly get a majority in the French Assembly.

Polling now show Macron's party, La République En Marche, achieving a huge majority in Sunday's elections.  In the most recent Reuters poll, Macron's party (shown in yellow in the graphic below) is winning 395 to 425 seats in the 577 person Assembly.  This would be the largest Parlimentary majority for any party since Charles DeGaulle's victory in 1968.

So what does this mean?  It means that Macron has the majority he needs (and an electoral mandate) to make the changes to campaigned on.  What explains this stunning result?  In my view this is a combination of a surprising degree of political talent in this newcomers, and a French people ready for change.

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