French President Emmanuel Macron’s latest political gamble is bordering on insanity: Trying the same thing, but expecting different results. Sebastien Lecornu, the prime minister whose government broke records on Monday last week after collapsing within 14 hours, has been reappointed sans some of the more controversial ministerial picks from last time.
As before, the aim is to court the center-left with policy concessions, avert snap elections and pass a budget that would achieve stability on the road to the presidential elections in 2027. What has changed is Macron’s apparent willingness to put his reform legacy on the line to get there. It might not be enough.
Survival for 39-year-old Lecornu’s Cabinet of political exiles and technocrats boils down to 25 votes, or about one-third of the center-left Socialists’ parliamentary seats. That is all it would take in theory to topple the government, assuming they are added to no-confidence votes from Marine Le Pen’s far-right National Rally; the rump of center-right Gaullists that are allied with her; the far-left France Unbowed; the communists; and the Greens. Hence why a lot depends on Lecornu’s freedom of action in tacking left — he supposedly has a “blank check” from Macron to nip, tuck or scrap his reformist legacy.
The very Socialist party that Macron quit to form his own movement has become kingmaker, and the concessions could be remarkable.
POLICY U-TURNS
Lecornu has already pledged to give up using the right to push through legislation by decree. He has given the nod to more taxation of high earners, and he could this week freeze Macron’s divisive 2023 pension reform, effectively kicking it out to whoever succeeds the president to relitigate in 2027.
The cost is high, with such a freeze equating to 0.3 percent of GDP in 2026-2027, according to Bloomberg Economics. Not to mention the risk that deficit and debt reduction goes in the wrong direction. What is old is new, and reforms that were essential have suddenly become optional.
This is an incredibly precarious path to survival, let alone a new government contract. Macron’s machinations are putting tactics and politics first, essentially betting that, deep down, both the center-left and the center-right want to avoid snap elections and distance themselves from the extremes. That remains a hope and not a strategy.
The number of policy U-turns being proffered might also only increase the nihilism and revulsion voters feel toward the current political class, storing up trouble down the line. They might also amount to little if a parliamentary coalition of convenience fails to toe the line, as it has done several times over the past year.
Investors have started to tune out a lot of this mess, and the impact on markets and the economy has been fairly contained. Fair enough — but that is related to factors outside Macron’s control. The artificial intelligence boom — or bubble — is spreading its magic to blue-chip companies such as Legrand SA, which is benefiting from data-center spending and attracting takeover interest from ABB Ltd.
The private sector has also been quick to adapt to changing geopolitical shifts like US tariffs. Moreover, there is implicit trust that the European Central Bank and the European Commission will have France’s back if ever the volatility becomes a meltdown. Some or all of these factors might not last much longer, not least if France rings in the New Year without a budget.
‘WARRIOR MONK’
The main revelation of this drama has been Lecornu himself. The loyal, self-styled “warrior monk” has seen his approval ratings tick up with every twist and turn of a governmental mission he insists is for the good of the country. In another time and place, he might be cast as the “providential man” the French so often look for in times of crisis.
Other establishment pretenders to the throne, from Edouard Philippe to Gabriel Attal, are slowly, but surely losing ground against Le Pen in the first-round polls. Still, for the time being, Lecornu looks caught on the political equivalent of a life raft without a paddle — and the sharks are circling.
Lionel Laurent is a Bloomberg Opinion columnist writing about the future of money and the future of Europe. Previously, he was a reporter for Reuters and Forbes. This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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