Elections for the euro

Today the first round of the French presidential election is being held. No candidate will obtain an absolute majority and therefore a second round will take place on Sunday 24 April. Macron is leading in the polls, but the gap with Le Pen has narrowed recently. If these two candidates face each other on 24 April, the difference will become even smaller. Macron will then win with the smallest possible majority, although it should be noted that populists are difficult to gauge and tend to score higher in actual elections than pollsters expect.

The interest in these elections is not that great; the French population seems to have lost faith in politics. French people accuse Macron of being too preoccupied with Europe and Russia in the past months and that he should be president of the French republic in the first place. Furthermore, the handling of the Corona crisis has not increased Macron’s popularity. Now, it is normal for the popularity of a president to decline during his term of office, but Macron is doing worse than previous presidents.

Before that, Macron had already caused the problem with the Gilets Jaunes. The French population consists of three groups. The first group are the people in the cities, mainly Paris, with the highest incomes. In theory, those incomes can be taxed higher, but when the rate went up to 75 per cent, it was precisely this group that proved remarkably mobile. If the French government, which is already large (it once peaked at 58 per cent of the economy, but fortunately that has been reduced), wants to collect even more taxes, it will not be possible with this group. The second group are the people in the banlieues, who on balance receive money from the government, so there is nothing to be gained there either. For the presidential candidates, the banlieues symbolise everything that is wrong with the country: criminality, Islamic separatism, failed integration and drug trafficking, an image that is, incidentally, cultivated by the media. In the meantime, however, the sharp edges have been removed and the banlieues appear to be providing the much-needed creativity and innovation. Macron is blamed for the complete lack of a vision in these neighbourhoods but seems — apart from Melenchon — to be the candidate that people from the suburbs could vote for, except that people from the banlieues never vote. Finally, there is a large group in the French countryside, including the lower middle class. There, a large part of disposable income is spent on fixed costs. Moreover, a relatively large part goes to energy, because there is no public transport in the countryside. People travel long distances for work. A large part of income is spent on energy. When Macron comes up with a 50% tax on fossil fuels, these people put on their yellow jackets and started protesting. To think that, when it comes to changes in French society, the French seem to prefer revolutions, it seems that it is time for the Sixth Republic. A trigger for any revolution is, of course, rising prices in France too.

In addition, the pension reforms have not increased Macron’s popularity and there is the scandal surrounding McKinsey, which is allegedly involved in money laundering and tax fraud in France. Under Macron, the hiring of consultants such as McKinsey rose sharply. For example, McKinsey was hired to solve the problems surrounding the corona crisis. Not only did this earn Macron the reproach that the French government was no longer able to carry out its own tasks, but after McKinsey was brought in, the approach to the crisis was even more disastrous. The climax came when, at the beginning of this year, Macron labelled the unvaccinated as second-class citizens. That is very much against the spirit of liberté, égalité and fraternité.

In addition, the pension reforms have not increased Macron’s popularity and there is the scandal surrounding McKinsey, which is allegedly involved in money laundering and tax fraud in France. Under Macron, the hiring of consultants such as McKinsey rose sharply. For example, McKinsey was hired to solve the problems surrounding the corona crisis. Not only did this earn Macron the reproach that the French government was no longer able to carry out its own tasks, but after McKinsey was brought in, the approach to the crisis was even more disastrous. The climax came when, at the beginning of this year, Macron labelled the unvaccinated as second-class citizens. That is very much against the spirit of liberté, égalité and fraternité.

A president needs a majority in parliament to govern. There are elections in June. At the moment Le Pen has 6 of the 577 seats in parliament. After Le Pen’s win, a rather chaotic period will follow in the French parliament. Under the French district system, the country will be difficult to govern after June. There is then a risk of dollar-euro parity being reached. Something that, by the way, is not only a consequence of the French elections but also of the war in Ukraine. Because of the sanctions, Russians and, in the future, Arabs and Chinese will no longer want to hold the euro, and energy will no longer have to be paid for in euros, but in hard dollars. Expect an increasing trade deficit. In addition, there is a growing contrast between the policies of the ECB and the Fed, which is putting pressure on the euro.

French law prohibits the publication of exit polls before 8 p.m.CET tonight, but foreign media may be able to provide results earlier.

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