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World France election results deliver another blow to anti-EU populists

Emmanuel Macron attends a ceremony in Paris on April 24, 2017.

CHRISTIAN HARTMANN/REUTERS

The European Union is enjoying something of a comeback as populist challengers run out of steam and years of economic stagnation finally begin to lift.

Sunday's election results in France marked the latest in a series of positive signals for the EU, which only a few months ago faced real doubts about its future. French voters made pro-EU candidate Emmanuel Macron the overwhelming favourite to win the second round on May 7 and they did not deliver the kind of support to his challenger, Marine Le Pen, many expected. Indeed, Ms. Le Pen's support has been weakening in recent weeks, and on Sunday, she trailed Mr. Macron by nearly one million votes.

On Monday, Ms. Le Pen announced she is temporarily stepping down as head of her National Front party in what appears to be an attempt to broaden her appeal beyond the far-right party's traditional supporters.

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Populist movements in the Netherlands, Germany and even Britain have also been slumping in recent months, giving hope to EU backers that the tide may be turning. After Sunday's results in France, Peter Altmaier, the chief of staff to German Chancellor Angela Merkel, tweeted "the result for Emmanuel Macron shows: France AND Europe can win together! The centre is stronger than the populists think!"

And on Monday, European Commission President Jean-Claude Juncker was quick to congratulate Mr. Macron. "The choice was between defending what Europe represents and another option, which aims to destroy Europe. So it's a simple choice," Mr. Juncker's spokeswoman told reporters in Brussels.

It's quite a change from last fall, when EU leaders were reeling from Britain's vote to leave the EU, the election of Donald Trump in the United States and the rising popularity of anti-immigration forces across the continent. In many ways, 2017 was seen as a defining year for the EU, with elections in several key countries including the Netherlands, France and Germany. Dutch Prime Minister Mark Rutte, whose pro-EU government was re-elected, used a sports analogy to describe the seriousness of the situation, saying last month that the Dutch election was "the quarter-finals in trying to prevent the wrong sort of populism to win." He added that: "The semi-finals are in France in April and May and then in September, in Germany, you have the finals."

Ms. Merkel is also leading the polls in Germany and the populist challenger, Alternative for Germany (AfD) has fallen into disarray. Even in Britain, the UK Independence Party, which led the drive for Brexit, has all but faded away and won't be a factor in the coming election on June 8.

Some say the tide began to turn after the election of Mr. Trump, when voters got to see what opting for a populist leader can mean. That seemed to be the case in the Netherlands and France, where pro-EU parties made Mr. Trump's early miscues as President an issue in the campaigns.

"Despite all the hype [in France] about the rise of populism, 60 per cent of voters went for mainstream candidates," said Timothy Ash, an economist with London-based Bluebay Asset Management. "With the AfD in the wane in Germany, it seems like Trump marked the turning point for electorates playing the protest vote. In an uncertain world, they rather go for what they know best and want to take fewer risks. That could be the bigger story for 2017 – seen in Dutch elections, maybe U.K. and very likely Germany."

The EU is also benefiting from the rise of a new breed of young, pro-European politicians who don't come from establishment parties, making them credible alternatives to populist figures such as Ms. Le Pen, Geert Wilders of the Dutch Party for Freedom and former UKIP leader Nigel Farage.

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Mr. Macron is just 39 years old and his En Marche! movement is filled with young professionals who embrace Europe and its open borders. Jesse Klaver, the 30-year old leader of the Green Party in the Netherlands, took the country by storm in the election last month with his pro-Europe, pro-immigration vision and the Greens are now on the brink of joining a coalition government for the first time. And in Britain, the Liberal Democrats have won increased support under leader Tim Farron, 46, as the defenders of the EU and an alternative to the hard Brexit approach of Theresa May's Conservatives.

Alexander Lambsdorff, a vice-president of the European Parliament, went so far as to describe Mr. Macron as a new John F. Kennedy and said on Sunday that he hoped "this independent, fresh French John F. Kennedy, if you like, succeeds in setting policy with his ideas."

Economics, too, are helping. By almost any measure, economic activity is picking up across the euro zone, even in France where businesses have been expanding at the fastest rate in nearly six years. Unemployment across the euro zone has fallen to its lowest level in almost eight years and gross domestic product growth is expected to increase by 2 per cent this year, up from 1.7 per cent last year.

To be sure, there are plenty of challenges. Unemployment is still at 9.5 per cent across the euro zone and close to 10 per cent in France. And the threat to the EU from populist parties is far from over. Italy is slated to hold elections this year as well and the populist Five Star Movement is leading in most polls. Party leader Beppe Grillo has promised to hold a referendum on the euro if he wins.

Mr. Macron also faces enormous challenges if he wins in two weeks. Traditional politics in France have been upended with both mainstream parties on the right and left doing poorly on Sunday. Mr. Macron's En Marche! movement is only a year old and it could have a tough time winning a majority of seats in parliamentary elections in June. He also won just 23.8 per cent of the vote on Sunday, compared with more than 30 per cent for first-round winners in previous presidential elections. And Ms. Le Pen wasn't far behind, at 21.5 per cent, meaning she still has a considerable block of supporters who could deliver seats to the National Front in the parliamentary vote.

"It is highly likely that [Mr. Macron] will be elected president but he will then find himself leading a country with an unprecedented level of political fragmentation, which leaves the question of knowing whether he will have a majority to govern wide open," said Bruno Cavalier, chief economist at Oddo BHF, a Paris-based investment firm.

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For now, though, the prospect of France leaving the EU has receded. That helped drive up the value of the euro by as much as 2 per cent on Monday against the U.S. dollar while European stock markets jumped around 3 per cent.

That's good news for people such as Nina Halimi, a 27-year-old law student in Paris who voted for Mr. Macron because of his strong commitment to the EU. People "blame Europe for everything, but it's a fantasy," she said Sunday as she watched the election results. "If Emmanuel Macron wins, it means that Europe is still strong in France and that the idea of the European people, that we can be united, that we need Europe to move forward, is winning."

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