Mad about the boy

He is 39 and-a-half years old. He came top at Sciences Po and ENA. He was Minister of the Economy before he engaged in a death-defying display of political trampolining which took him to the very top. He is clever, sophisticated and good-looking. And he is President-Elect of France, taking the keys of the Élysée Palace next Sunday.

The youngest leader to arrive in power since Napoléon Bonaparte in 1799[i], what are investors supposed to make of Emmanuel Macron? And why does this writer feel so profoundly troubled by his arrival in power?

All smiles in Berlin

Angela Merkel’s face was locked in a rictus of delight for most of yesterday evening. President Juncker did a little jig (and then fell over). The deep-EU’s Manchurian Candidate, a man almost unknown outside France one year ago, had made it.

The Euro-élite will not now have to face the guillotine, after all. The European populist revolution – the European spring which looked so likely after the Italian referendum fiasco on 04 December last year – has been cancelled. The European flag hangs from the Arc de Triomphe. And Monsieur Macron arrived for a public acclamation at the Louvre last night to the sound of Beethoven’s Ode to Joy – not the Marseillaise![ii]

Why did Monsieur Macron win?

The pollsters, the bookies and the ruling elites knew that the chances of a victory for Madame Le Pen were miniscule. France, given the choice available, was always likely to vote against Madame Le Pen. It is important to understand why.

Just for the record, the British left who have labelled Marine Le Pen a fascist are guilty of both ignorance of history and of mental laziness. It may be that her picaresque father deserved that appellation; but the daughter is not the father. She is not a racist (there are black French citizens on her staff); she is not an anti-Semite (her partner is of Jewish heritage); she is not homophobic (her chief strategist, from whom she is inseparable, Florian Philippot, is openly gay). She is committed to the democratic process. But, for all that, she is still seen as toxic by most French people.

That is because France is a nation that has – perhaps of necessity for its own mental health – sought to bury its own past. There are deep issues that the French feel unable to talk about. The collusion with the Nazis in the mass deportation of French Jews to the death camps during the occupation of WWII. The massacres of people of North African heritage (not least in Paris itself) during the Algerian War (1954-62). The fact that a coterie of Nazi collaborators were permitted to prosper and rise to power under the Fourth Republic…


The French are appalled by Islamist terrorism but they are not convinced that marginalising France’s five million-strong Muslim community would have helped. Madame Le Pen would style herself as a patriot rather than a nationalist; but there were real fears that she would have opened up old wounds. A Le Pen victory would have forced open a locked tomb piled high with malodorous bones. The French did not want to go there.

She also lost the intellectual duel. During the final TV debate on 03 May, Monsieur Macron forensically defenestrated Madame Le Pen’s half-baked idea of reintroducing the Franc as a parallel currency to the Euro. And despite her mocking, teasing animal cunning she could not escape a few almost Dianne Abbott moments at the hands of the trained economist.

Monsieur Macron – for all his vacuity – represents much more closely France’s image of itself: liberal, cultured, sophisticated, brilliant and with unimpeachable taste. Very few Macron voters knew what concrete economic policies they were voting for[iii]. Like people who buy sophisticated French cosmetics, they were voting hope.

What’s not to like?

Monsieur Macron’s economic and social programme is vague. However, we can work out what will be his main themes from what he has said during the campaign and from the prevailing ideas of the elite cadre of which he is part.

We know that he is neither right nor left in the same way that Tony Blair pursued a Middle Way and, David Cameron pursued a Big Society. And we also know that attempts to define an empty political agenda by its glossy packaging are always exposed as gimmicks in the end.

Let us just dispense with the canard which has gained currency that M Macron is an “outsider”. He is nothing of the sort – he is the quintessence of the French establishment technocrat.

And let us just dispense with the canard which has gained currency that M Macron is an “outsider”. He is nothing of the sort – he is the quintessence of the French establishment technocrat – an énarque, a favoured son of the House of Rothschild (which is run, as Sir Claus Moser used to say, on the principle of enlightened nepotism), a minister under the outgoing President Hollande, a darling of the arty Paris media salons.

Et alors? For now, I will share just three issues where I believe that President Macron is going to make swift decisions which will have unforeseen consequences.

Migrant Troubles

Monsieur Macron is one of the few European politicians to have come out in favour of Frau Merkel’s decision to welcome the tide of migrants into Germany (and therefore Europe). He apparently sees no connection between the migrant issue and the matter of security. He does not seem to regard the lack of internal borders in Europe as a cause for concern.

He has said with admirable consistency that he is going to strike down the Sangatte Protocols (1991 and 2004) and point the refugees who assemble in Calais and Dunkirk in the direction of the UK. He says the congregation of these people on French territory is “an English problem”.


As I explained some time ago, the Sangatte Protocols were in fact codicils to the Treaty of Canterbury (1985) which was signed by Mrs Thatcher and President Mitterrand in the Chapter House of Canterbury Cathedral. This provided for border checks for people passing through the Channel Tunnel by both sides in each other’s countries.

To rip this treaty up would be a big deal – especially at the very moment that the British are trying to negotiate a much bigger treaty. Moreover, potentially hundreds of thousands of migrants would then flock to the Gare du Nord, creating chaos in Paris. (I wonder what the bankers whom Monsieur Macron hopes to poach from London would make of that).

It would give Britain no choice but to close the Tunnel completely or face an influx of asylum seekers. This would cause huge disruption to commerce. The acrimony engendered would be molten.

Fiscal union means protectionism

My second concern is that President Macron is a European true-believer, in the image of his ideological uncle, Jean-Claude Juncker. He wants free trade within Europe but would like to protect Europe from outside. He wants to further beef up the procurement rules so that European governments can only purchase from EU companies. He is a fan of tighter so-called anti-dumping laws that would disadvantage any states that had, for example, lower wages, lower taxes or less rigorous labour laws than those that obtain in the EU.

He believes in a strong fiscal union, not just across the Eurozone but for the entire EU. That means that taxes must be “harmonised”. In French the verb meaning “to harmonise” or “to standardise” is normaliser. This reveals a fundamental difference in the mindset of the elite French mandarinate from which he comes.

He believes in a strong fiscal union, not just across the Eurozone but for the entire EU. That means that taxes must be “harmonised”.

To my empirical, Anglo-Saxon mind it is quite natural that different states which experience different economic conditions should set different tax rates. But to President Macron’s mercantilist French mind, all tax rates in a common currency area should be the same. French socialists have argued for years that the minimum wage should be the same across the EU – even though Portuguese GDP-per-head is about one half that of Germany. As long as the minimum wage in Portugal remains below that of France, in their view, that gives Portugal a competitive advantage.

Ideally, Monsieur Macron would like all tax rates across the 28 (sorry, 27) countries of more than 500 million people to be set by a European Ministry of Finance. Further, the French mandarinate think that an EU Ministry of Finance could rebalance the French influence lost recently within the European Central Bank (ECB). They want common taxes for a common currency.

Even centrist French people sometimes express the strangest views on the matter of tax. They will tell you that it is “unfair” that in the UK employers pay National Insurance Contributions on salaries of only 13.8 percent whereas in France employers’ social charges are more like 40 percent. They don’t mean that the French level is excessively high, but rather that the UK level is objectionably low. The idea that a democratic country should be able to set its own levels of tax and its own levels of welfare payments is anathema.

He will call for a standard EU corporation tax very soon

And the first candidate for tax harmonisation is what we in the UK call corporation tax – the tax on corporate profits. There has been increasing consternation in the corridors of Brussels and Berlin about the “unfair advantage” that our Irish friends have created for themselves with a corporation tax rate of just 12.5 percent. The European Commission has initiated the first of a series of legal challenges to the Irish government in respect of their “grandfathering” rules. These are nothing to do with elderly gentlemen, but rather with the ability of multinational giants like Apple (NASDAQ:AAPL) to book their gargantuan global profits in Ballykissangel.

The Europeans are also aware that President Trump and his team are about to slash corporation tax in the USA. This is therefore a good moment to act. I am predicting that before his fortieth birthday on 21 December this year, President Macron will put forward a proposal for a common corporation tax rate across the Eurozone of 25 percent of profits. It will probably be part of a Plan Macron. It will be heartily welcomed by Frau Merkel and Herr Juncker. France will be back in the driver’s compartment, sitting next to the train driver, once again.


When the Irish object they shall be slammed down like the minor monarch who once had the temerity to interrupt Napoléon: Taisez-vous, roi de Bavière.

Of course the headline rate of corporation tax is actually less important than the regime of capital allowances which determine the calculation of taxable profit – but Brussels has been itching to normalise these for years.

Those states which are outside the common currency stroke common corporation tax area – of which, Britain, still stuck in the revolving doors – will be regarded as third parties. Slowly but surely, Monsieur Macron and his technocratic elite, no doubt goaded on by Merkel 4.0 after she is returned in September, will build a wall around Europe. And guess who’s going to pay for it.

Market fizz

This morning the markets are in party mood. A Le Pen victory would have heralded a period of extreme uncertainty – and the dragon has been slain. The spread between French government bonds and Bunds has predictably narrowed. But ultimately, the markets will judge Monsieur Macron on whether he can re-animate laggardly French growth and reduce unemployment. It will take until the end of the year to get a sense of that.

Next week the beautiful boy, Macron, will meet Mother Merkel. He likes older women and there will be lavish displays of affection. The European blue train is out of the sidings and regaining speed – and it is on a collision course with a red, white and blue train chugging in the opposite direction…There’s going to be an awful smash.

I was credited with having concocted the terms Soft Brexit and Hard Brexit in an article that I wrote in June last year. What is now looming into view, with President Macron’s arrival, is Nasty Brexit. Very shortly I shall explain just how nasty it might get.

[i] Napoléon was 30 and gained power by dint of a military coup!

[ii] The Ode to Joy – third movement of Beethoven’s 9^th symphony is the anthem of the European Union. The Marseillaise or the battle cry of the Republic during the French Revolution and finally became France’s official national anthem in 1879.

[iii] If you speak French, check out the hilarious street interviews at: https://www.facebook.com/MalalaiseOfficiel/?pnref=story