Eleven Big Problems with the New French President

From Le Pen's fire to Macron's frying pan.

Even though there are plenty of reasons to be happy about the defeat of Marine Le Pen in the French presidential election, the new president Emmanuel Macron, with his stance on the EU and his questionable positions on economic interventionism, likewise deserves some pro-liberty opposition. Here are 11 key issues for the 5 years to come:

1. Integration in the EU and the Eurozone

Emmanuel Macron hasn't made a secret out of his appreciation for the European Union. Quite the contrary, the 39-year old centrist ran as a fervent pro-EU candidate: before his victory speech at the Louvre in Paris, he walked on to the stage while Beethoven's "Ode to Joy" (also known as the EU anthem) was playing in the background. In an interview with the French newspaper Libération, Macron said that "you cannot be timidly European" and called for fiscal harmonisation in the EU.

France's new president wants to collectivise military forces and surveillance programs, for instance, by creating an EU biometric ID card for all citizens. For the Eurozone, the body organising the policy of the European common currency, Macron calls for a Minister of Finance and a completely new parliament, which would increase bureaucracy.

Most importantly though, Emmanuel Macron wants to implement a Eurozone budget, which would institutionalise a budgetary assistance to countries such as Greece and also finance "future investments", a term which has not been specified. Such a budget would resemble the German system of the Länderfinanzausgleich, a system of equalization payments within the Federal Republic of Germany, redistributing financial resources. As long as countries in the Eurozone are dependent on the economic performance of one another, such a policy seems inevitable in the long run. It will further integrate the European Union as a whole.

A further important question is the financing of this Eurozone budget. If Macron were to suggest that the budget should not originate from the member states but from a direct tax, this would change the perception of European institutions as such: no EU-body (or body associated with the EU) is able to levy its own taxes so far.

2. Industrial Protectionism

In his manifesto, Emmanuel Macron promises to advocate for a Buy European Act, which would limit private-public partnerships to those companies which locate at least 50 percent of their production in Europe. It's a little hard to grasp Macron being able to criticise Marine Le Pen during the campaign for her protectionism, when the proposals of the new president narrow down to protectionism, only on a larger geographical scale.

Countering the National Front's "patriotic protectionism" with a Buy European Act doesn’t make him the free trade candidate. Doing so reveals that Macron is equally economically unaware of the consequences of restricted trade: fewer choices, higher prices, fewer jobs, and toxic diplomatic relations.

In a time when public works are already ridiculously expensive because the market is shared between a few big companies (General Electric is a notable US example of this phenomena), restricting companies’ access to the European market will cost people money in the end: the taxpayers.

3. Confrontations with Central and Eastern Europe

Following their recent constitutional reforms, Macron has promised to impose sanctions on Poland, angering the head of the governing Law and Justice Party (PiS) Jaroslaw Kaczynski in the process. After Macron compared the party to Le Pen's far-right in France, the Polish Foreign Ministry responded:

"Pointing to a supposed alliance between Le Pen and the leader of Law and Justice is a manipulation. And the inclusion of Jaroslaw Kaczynski in the ranks of 'Le Pen's friends who break numerous freedoms' is improper and highly unsuitable."

Macron has proven to belong to the arrogant part of the Brussels Eurocracy that diametrically opposes Euroscepticism, which has become more common in the Viségrad countries in the last years.

Confrontations with Central and Eastern Europe will only deepen the fundamental distrust of these countries for their Western European counterpart. Furthermore, if the French president indeed seeks to exclude members based on their lack of respect for EU treaties, the following countries would also have to leave the union: according to the 2009 Copenhagen Accord, Hungary and, according to the 1992 Maastricht Treaty, Greece, Belgium, France, Ireland, Portugal, Spain, Cyprus, Italy, Austria, Malta, Germany and Croatia.

4. Interference in the Agricultural Sector

During the campaign, Macron pandered to one considerable electorate, farmers. He echoed the European Union’s position on the agricultural sector: praising free trade while practising protectionism.

The EU's CAP (Common Agricultural Policy) directly subsidises European farmers in order to protect local economies. The EU also imposes import taxes on products coming from outside the union and requires high food standards, effectively blocking products that come from Africa. Emmanuel Macron likewise promises to favour "fiscal and social convergence in Europe" and to reduce competition for European farmers. 

Neither Macron nor the EU have learned anything from the 19th century Corn Law disaster in the UK, which intended to reduce competition for British farmers but only increased food prices for the poorest of the poor.

5. Elimination of Tax Competition

The manifesto of the new French president says that he wants to "get rid of fiscal optimisation" and that a tax (on the EU level) on the sales revenue of electronic services would "help lead the fight against tax havens".

Macron's pledge in favor of tax harmonisation, which has and will continue to be opposed by EU members such as Luxembourg or Ireland, is essentially a fight against tax competition. In fact, low-tax countries in Europe have been a safeguard against overtaxation throughout the continent. Having a country like France, which practises a 34 per cent corporate income tax, object to it, is only mildly surprising.

6. Military Interventionism in Syria

Emmanuel Macron wasn't big on foreign policy from the start, which is why he is suspected to follow in François Hollande's footsteps of promising "a joint solution to the problem" when it comes to dealing with Syria. After the chemical weapons attack, Macron stated that he would favour a military intervention under the guide of the United Nations: an act that would further destabilise the region. 

7. Government Prying in the Housing Market

In order to combat the problem of increasing housing prices throughout the country, the new president has suggested building tens of thousands of housing facilities for young people and increasing so-called "social housing", which are subsidised housing opportunities for low-wage earners. France already has an extensive system of housing subsidies, which allows up to €175 of monthly grants for renters.

If he follows through, Macron will be soon be confronted by Bastiat's principle of the Seen and the Unseen. Increased investments in the housing market will drive up overall housing prices for the individuals who do not benefit from government-constructed housing facilities. As soon as the French government promises increased housing subsidies, owners will continue increasing rents. Austrian economist Ludwig von Mises described the cycle this way: profit-seeking entrepreneurs respond to the incentives created by bottlenecks and shortages that prior interventions have artificially created.

8. Extreme Secularism

France is known for continually taking the idea of secularism to new heights. Macron's rival Marine Le Pen wanted to ban "ostensible signs of religion" from public places, including hijabs and yamakas. On his website, Emmanuel Macron quotes one of his supporters saying:

Not finding a job when wearing a headscarf worries me... knowing that if I wouldn't wear it, more doors would probably be open to me. With or without a headscarf, I will remain the same person."

The issue here is not that his party suggests that there should be increased tolerance for different religions, but that the head of state sympathises with people who complain about employers' freedom of association. The European Union Court of Justice ruled in March that companies do have the right to ban employees from wearing religious symbols in the workplace, reaffirming that religious liberty ends where property rights begin.

Macron's position on religious liberty is equally problematic when it comes to schooling: he suggests banning the headscarf for minors in all schools, as they "are unable to take these decisions about religion just yet", infringing on the right of private schools to choose their own rules within their company structure.

9. A Permanent State of Emergency

As a candidate, Emmanuel Macron has stated that he wants to maintain the state of emergency that France declared at the end of 2015. This has given the executive sweeping powers to search houses and wiretap people without a warrant. Amnesty International has criticised the continuous extension of the state of emergency, as it normalises an extensive police state order.

"This extension of the state of emergency misuses a general menace and risks becoming a justification for a permanent state of emergency.", says John Dalhuisen, director of Amnesty International Europe.

Until now, the government (under which Macron served) has said that it would extend the state of emergency "as long as ISIS isn't defeated". Emmanuel Macron, by taking the same position, is in for indefinite extension of a regime that offers little to no civil liberties.

10. Continuation of The Drug War

In his book Révolution, Emmanuel Macron had favoured a partial decriminalisation of cannabis, the way it is practiced in many European countries such as Belgium, Switzerland, Spain or Italy. That was in November. By the time he came closer to taking the Élysée Palace, Macron had spoken out against this position, presumably in order to keep the vote of social conservatives.

The French Republic has remained one of the strict European countries when it comes to the repression of drugs, financing a costly drug war has proven to have no effect. Quite in contrary, the République frequently leads the field when it comes to drug consumption on the old continent. By keeping the status quo on weed, the new president will keep the penalties of €3,750 and up to one full year in jail for mere possession.

11. "The State Will Pay" Logic

Emmanuel Macron echoes the views of François Hollande that governmental expenses aren't costly because they're being "paid by the state". In his manifesto on spending power, Macron suggested scrapping the local inhabitants tax, a costly local tax that is especially unfair for low-income workers, for 80 percent of the people. However, the candidate did not suggest getting rid of the tax, but to reimburse the citizens after they paid it to the local authorities. In a video for his Twitter account, Macron explains that the government, not the citizens, would now pay the tax. 

This is ultimately the biggest issue that France is facing today: a political class which is unable to grasp the productive origin of the money it spends and its ability to masquerade its overspending by channelling the funds through different administrations.

In the end, taxes are only paid by individuals.

And it's only individuals who will be harmed by all of these policies.

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