Trade

Emmanuel Macron, anti-European

Since taking office, French President Emmanuel Macron has portrayed himself as a champion of Europe. He has promised to make the EU stronger and more protective, in a lengthy and widely followed speech at the Sorbonne in September.

Not everybody’s buying it. Six months into his term, a growing chorus of critics is accusing the French President of veering into a form of soft protectionism, putting the European single market at risk.

Macron, critics say, is using the departure of Britain — long Europe’s most powerful defender of the single market — to shift the EU toward a more protectionist agenda, aided by a German leadership worried about the prospect of a rising far-right.

Among other strikes, they cite the following French-led moves as going against the spirit of the single market: an overhaul of posted worker rules; France’s temporary nationalization of shipyards; its embrace of geographic indicators for dairy products; and plans to allow limited price fixing for agricultural products.

“As long as Britain was in the European Union, there was a division of labor, with the U.K. as the voice of free trade and defender of the single market,” said Nicolas Véron, an analyst at the Bruegel think tank in Brussels. “The departure of the U.K. changes that game, with the Netherlands and Scandinavia becoming more vocal on these issues, while France is taking more of a leadership role.”

“Macron is in line with [President Jean-Claude] Juncker, who says that if Europe doesn’t respond a bit better to citizens’ expectations, they will turn against it” — Anonymous French diplomat

And while Macron has reaped praise for his ambitious approach to Europe — calling for a shared European “strategic culture” — when it comes to trade and the single market, time after time, the French President has taken measures his critics describe as erecting barriers and favoring French interests.

Interventionist tendencies

For those who have followed Macron’s trajectory over the past five years, his criticism of unfettered free trade is nothing new. As economy minister, he crusaded for tougher rules against dumping of Chinese steel products in Europe.

But he also allowed a number of foreign takeovers of French companies, marking a clear break with the France-first, interventionist ideology of his predecessor, Arnaud Montebourg.

It was only when Macron swept to the presidency in May that he showed his own interventionist tendencies, beginning with his move to block an Italian takeover of STX shipyards in eastern France and nationalize them temporarily.

His willingness to break a taboo on nationalization, going further than his socialist predecessor, raised alarm among free-traders: Would European leaders now simply invoke “strategic” reasons to block any takeover they did not like?

Especially confusing was the fact that, a few years earlier, France had authorized a Korean firm to acquire the STX shipyards without argument.

“Newly elected French President Emmanuel Macron wants to revive an old French ambition, namely to exclude a larger number of French companies from EU takeover regulations,” Frits Bolkestein, former European commissioner for the internal market, customs and taxation, wrote in POLITICO in June.

Polish Prime Minister Beata Szydło has clashed with Macron | Philippe Wojazer/AFP via Getty Images

“The Commission would do well to issue a sharp reminder that countries are not allowed to introduce measures that ‘could jeopardize the attainment of the Union’s objectives,'” he added.

Then came Macron’s campaign to rewrite EU rules on posted workers. Seeking to shorten the duration of postings and harmonize social fees, it infuriated leaders in Central and Eastern Europe who interpreted the move as an assault on their economic models.

In one memorable clash, Polish Prime Minister Beata Szydło accused the new French president of being “arrogant” and inexperienced. “Perhaps his (Macron’s) arrogant comments result from lack of political experience,” she said in August.

A Central European diplomat accused Macron of simply repackaging old French protectionism: The only thing new “is the strength of the rhetoric.”

Macron prevailed to the outrage of several EU states, including Spain. The French-led charge was a blow to the Spanish economy with its legions of expatriated workers and a strike against the principle of free movement of people and services, Spanish officials argued at the time.

If Macron’s critics hoped he would rest after his diplomatic victory on posted workers, they were disappointed.

With Britain sidelined and German Chancellor Angela Merkel unable to act following the failure of talks to form a governing coalition, Macron is pressing ahead with initiatives that all have implications for the single market.

These include: France’s embrace of geographic indicators for dairy products, at Belgium’s expense; plans to ban the herbicide glyphosate well before an EU authorization lapses in five years’ time; and measures to allow for limited price fixing on agricultural products, part of an “estates general” on farming.

And while Macron is a keen supporter of a digital single market, he also pressed for taxation of web-based firms revenue — an idea that industry players said would damage the level playing field.

For Swedish liberal MEP Jasenko Selimovic, Macron represents a growing trend across the bloc, where governments push protectionism to fend off the threat of populist parties.

The French President has not rested on his laurels after a diplomatic victory on posted workers | Philippe Huguen/AFP via Getty Images

“I think the single market is being damaged from all sides,” he said. “This is a serious problem, because if you cannot move people around the European Union, you cannot move commodities or services either, and this is being defined as one of the major problems in the Brexit case.”

Antidote to populism

Quizzed about Macron’s approach to the single market, French officials argue that his European detractors are missing the point.

The French president, they say, is trying to strengthen the EU against abusive foreign trade practices with tougher anti-dumping tools — a measure they say will bolster, not undermine, the single market.

French initiatives to support of farmers, meanwhile, fall outside the strict purview of the single market because agricultural policy has always been in a league of its own. “Agriculture is completely separate,” said Véron.

On posted workers, they argue that France is not hurting the single market, because Macron’s initiatives apply to all EU members and aim to harmonize social and living standards across the bloc in order to promote labor mobility.

“I think we’ll damage Europe by closing it, by making it more protectionist and at the same time, not having the extreme right falling in the polls” — Swedish liberal MEP Jasenko Selimovic

What’s more, they say critics are missing out on Macron’s political aim with posted workers and takeover defenses: He is trying to address concerns about the single market that have contributed to the rise of populist forces across the bloc, bringing National Front President Marine Le Pen within striking distance of the French presidency.

“Macron is in line with [President Jean-Claude] Juncker, who says that if Europe doesn’t respond a bit better to citizens’ expectations, they will turn against it,” said a French diplomat. “The only thing is that Macron is more straightforward than other leaders on this issue. We can’t leave a door open to populists.”

Selimovic, the Swedish liberal, said he understood Macron’s intentions, and could see that the approach is bearing results. But he worried that by the time the French president is finished, there would be little left of the single market as it existed in the early 2000s.

“I think we’ll damage Europe by closing it, by making it more protectionist and at the same time, not having the extreme right falling in the polls,” said Selimovic. “We could end up with a double problem.”

Original Article

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