France is a country that does not reform easily – at least not without “blood” and widespread protest. Its history has repeatedly shown this. Indeed, it is from France that we have also inherited a strong culture of questioning and dissent.
But now the country has reached a dead end. For many years, tensions simmered, yet somehow it managed to maintain its enviable way of life, admired across Europe. To the casual visitor, it was striking, for example, that in a provincial tourist town it was rare to find a proper place to eat during the midday break. This lifestyle – and the social state that supports it – can no longer be sustained. It is too costly, and the financial markets, as we all know them, are no longer willing to fund it at manageable interest rates. They demand reforms and cuts, which are politically unpalatable. The paradox is how mild these reforms are compared with those imposed on Greece during the bailout years. The equivalent measures in France would spark a “Bastille Day” multiplied a hundredfold.
Yet here we are. The eurozone cannot, and is not prepared to, handle a French debt crisis – the numbers are simply too large. The only way to manage it would be for Germany to shoulder the cost by accepting higher borrowing rates itself – a political disaster in Berlin for anyone who attempted it.
Emmanuel Macron was a brilliant idea of the French establishment, intended to save the day by promoting a modern, reform-minded technocrat. He has taken it as far as he can. He now seems worn down by the pressure of real deadlocks and the pervasive toxicity engulfing the political landscape. It is a loss for Europe, because he is the only leader capable of articulating ambitious and concrete proposals.
But he has deflated and can offer little more.
France is entering a crisis that will last for some time. The political crisis could become yet another cycle pushing France – and the rest of Europe – further to the right of the ideological spectrum. A fiscal crisis would be a different matter entirely, shaking the entire European framework. We will feel its effects even here, no matter how “shielded” we are, thanks to our secured debt.