Michel Barnier joins Macron’s last chance saloon
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Pierre Briancon
BERLIN, Sept 5 (Reuters Breakingviews) -Michel Barmier will soon regret the relative calm of the months he spent negotiating Brexit with London for the EU side. French President Emmanuel Macron’s new prime minister knows his appointment will divide the right and antagonise the Left. Even if he survives, he will have little chance of finding support for the tough fiscal measures that France now requires.
France has spent the last two months since June’s inconclusive election with a caretaker government. President Macron’s stated aim has been to find a prime minister who could build an alliance of mainstream conservatives and moderate socialists. Together with his own weakened party, which came third in June’s national vote, they might be able to muster a parliamentary majority.
In that context, Barnier, 73, seems an odd choice. Leaders of the mainstream right had already warned they would not take part in a Macron government. Barnier, who comes from their ranks, belongs to the centrist and pro-European wing of his party. But even if all the conservative MPs suddenly decided to support him, he could only count on a little over 200 votes in parliament - far short of the 289 majority needed to pass laws. With the left-wing parliamentary group unlikely to back a centre-right prime minister, the result will be a weak, minority government.
Barnier, a former French foreign minister and long-time European Commissioner, will at least bring Macron some diplomatic nous. He could help Paris navigate the waters of European Commission wrath after it became the only major European power whose debt load, now 115% of GDP, is still rising after the extraordinary bump of the Covid-19 years. The budget deficit may reach a whopping 5.6% of GDP this year.
France needs to prepare a budget for 2025 and send it to Brussels and the French parliament in three weeks’ time. The question is whether the political crisis of a government sent packing by parliament will come before or after a financial crisis triggered by worried debt markets. Investors now demand around 70 basis points more to hold 10-year French debt than equivalent German securities, up 20 basis points since June’s election.
Fear of a crisis may help Barnier’s government limp on in the short run, and survive any potential confidence votes. But he won’t be able to take the important decisions France needs to turn its fiscal situation around and start growing again. It must both cut spending and raise taxes in order to finance the massive public investment needs of the coming years in defence and the green transition. The task would be daunting even if Barnier could count on a solid majority. The odds that he will last more than a few months trying are thin.
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CONTEXT NEWS
French President Emmanuel Macron appointed Michel Barnier, the European Union's former Brexit negotiator, as his new prime minister on Sept. 5, in a bid to put an end to political paralysis following an inconclusive snap election in early July.
The left-wing alliance that won June's election accused Macron of ignoring the result by picking a conservative. It called for demonstrations against Barnier's selection but does not have enough seats to block the choice on its own.
The far-right National Rally (RN), parliament's biggest single party, indicated it would not block Barnier for now, but could do so later if a range of demands were not met.
Editing by Neil Unmack and Streisand Neto
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