‘This is the calm before a stormy winter in French politics’

President Macron must tackle inflation, an energy crisis and the war in Ukraine with an unstable Assemblée nationale - Simon Heffer gives his view

President Macron
President Macron says hardships imposed on the French people due to Russian sanctions are ‘the price of liberty’

This year’s rentrée is remarkably unlike last year’s.

Then, France was building up to presidential and parliamentary elections, and recovering from the economic tsunami of the pandemic.

Now, the elections have returned the predicted president, but the poll for the Assemblée nationale has left a legislature with no obligation to support the president.

Above all, there is a new crisis and sense of uncertainty as the backdrop to this political turbulence: the war in Ukraine, and its effect on energy prices and inflation.

Read more: Inflation, climate, pensions: a tough ‘rentrée’ for French government

France is faring better than UK

As in many European countries, France is facing a difficult winter, and its politicians will struggle to govern.

However, unlike Britain, where inflation has just touched a 40-year high of 10%, France has to cope, at the moment, with just 6.1%.

Also in the French government’s favour is that unemployment is falling, although it is still higher than in many western economies.

The good news, though, is limited.

‘Inflation will rip’

Elisabeth Borne, the prime minister, managed remarkably to push through a €44billion package to cushion inflation, and perhaps as a consequence her popularity has now overtaken President Macron’s.

The Borne initiative capped gas and electricity prices at 2021 levels, thereby using French taxpayers’ money to keep the costs of their own households down.

It won’t go on beyond December and, when it ends, and if international wholesale gas prices rise as predicted there is no chance of renewal, inflation will rip.

Read more: Gas cuts: how French firms and homes will or will not be affected

Read more: French wholesale electricity prices surge as energy crunch hits Europe

Learn from 1970s Britain

Price subsidies, as history relates, are a desperate resort in anything that pretends to be a market economy.

Britain tried them in the 1970s, with disastrous results.

They have been applied to diesel and petrol. They may not be necessary indefinitely.

Other producers, including America and some Middle Eastern countries, have raised production since the Ukraine war, and prices have fallen from their peaks in June and July.

However, the subsidies on energy prices will only be unnecessary if sanctions on Russia are eased; and that remains, for the moment, far less likely.

State subsidies creating calm before the storm

The energy price cap – a vogue term for a subsidy, but one nonetheless – has been facilitated by the French state’s huge share in EDF, the power company, in which it plans to buy an even greater stake.

Read more: EDF nationalisation is end of bumpy ride for French investors

The state ignores massive losses by the company it largely owns, in the interests of not further provoking a public who showed amply what they thought of the political class in the recent elections.

Again, this subsidy can only be temporary: it is piling up debt for the French financial system that, on this scale, is unsustainable.

The current comparative calm is the prelude to an inevitable storm, and one made worse to handle by the prevailing political instability.

Trouble brewing for Borne’s autumn budget

There are attempts to rein in spending elsewhere: such as a raising of the retirement age and a suggested tightening of the availability for welfare benefits.

Should either come into law (and they will be less appealing for parties to support than measures that make people feel better off) they will be just another excuse for the French to protest against the political class.

Trouble is ahead in any case, because the Républicains (right), who so far have not upset the applecart in the Assemblée nationale, have said they will not support a Borne budget, due in the autumn.

The number of the party’s MPs prepared to support M. Macron appears to be increasingly outnumbered by those who do not.

Macron has been honest about cause of hardships

The next few months promise to reveal a steady haemorrhage of M. Macron’s authority and, with it, greater restiveness and unhappiness among his electorate.

At least the president has been honest with his people about the main cause of the difficulties: France’s determination, along with the rest of the EU, Britain, America and most of the civilised world, to impose strict sanctions on Russia.

Read more: Macron: ‘France is at the end of its age of abundance’

It is clear that the sanctions have had a serious effect on Russia, but the idea they will make Putin’s regime fall swiftly, and even if it did that it would be replaced by something more humane, is far-fetched.

French pay ‘the price of liberty’

The president has described the hardships being imposed on the French people as ‘the price of liberty’, and he is right.

Doubtless, however, he would have preferred to be asking his people to pay this price against a background of political order.

As such, the horizon is bleak, as it is for most of France’s allies, and made worse by the likely temper of the Assemblée nationale.

Macron cannot waver over Russian sanctions like Germany

Germany, for so long the economic powerhouse of the EU, is because of poor strategic decisions taken during the Merkel years dangerously dependent on Russian gas.

A strong lobby is growing up in Germany to ease off on sanctions, with rumours of whole industries having to close temporarily in the winter if supplies are not renewed.

Equally, there would be strong opposition in Germany if measures were eased, and the country would because of its significance, attract international obloquy.

France is scarcely less significant, and after President Macron’s recent commitments to Ukraine any reverse in policy would wreck his credibility and reputation.

So as well as coming under serious pressure from French people struggling increasingly to put food on the table, he may have to spend much of the autumn wrestling with other EU leaders about the bloc’s attitude towards a foreign power that has acted with brutality and has disgusted the world.

Macron held back at home from being global leader

At least M. Macron has the good fortune to be experienced at statecraft and international relations.

His British counterpart, to be chosen on September 5, will be an absolute novice, and Herr Scholz of Germany is a relative one too.

President Biden of America is facing mid-term electoral oblivion in November.

M. Macron should therefore stand head and shoulders above them all.

But will his legislators let him?

There have been worse times to be president of France, but it is hard to remember them.

Simon Heffer is a regular columnist with The Connexion. He is also a columnist for the Daily and Sunday Telegraph

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