What does French result mean for Brexit?
24 April 2017
Emmanuel Macron has been installed as the overwhelming favourite to be the next French President - but what does that mean for business and Brexit? For the bigger economic picture, a Macron win removes the chance of a political and economic shock to Europe's core. Marine le Pen's calls for France to leave the eurozone have been seen as an existential threat to the entire European project. Macron's likely win has seen the French stock market and the euro surge as that threat is seen as  receding. A Macron win will be cheered by business who see him as untested and inexperienced but pragmatic and pro-business. Some argue that his business-friendly policies - such as cutting corporation tax from 33% to 25% and making it easier to fire (and therefore hire) workers - make France look more attractive to businesses scouring Europe for a potential EU base. Most bankers, for example, had put France near the bottom of the list when mulling any potential moves for those very reasons. A Macron presidency could see that change. But there are two good reasons a Macron win could still be good for the UK in its Brexit negotiations. First, Macron may want to cut taxes and water down workers' rights - but he has to form a government to do it, and may need the support of French socialists who were excited by Benoit Hamon's ideas of a universal basic income and 32-hour working week. His attempts to make France more attractive to business will have to navigate the rocks of coalition building. There have been many attempts to reform the French labour market. I can't think of a single success. The second is a wider point about the security of the European project. Fears that the UK's vote to leave the EU would inspire anti-EU sentiment right across Europe now seem to be fading. Geert Wilders' far right party in the Netherlands failed to live up to pre-election hype while its counterpart in Germany, Alternative fur Deutschland, is in disarray. The UK's antipathy to the EU has, so far, failed to catch on elsewhere. With that in mind, there is less reason to punish the UK in upcoming negotiations as a deterrent to other would-be leavers.
Some argue that his business-friendly policies - such as cutting corporation tax from 33% to 25% and making it easier to fire (and therefore hire) workers - make France look more attractive to businesses scouring Europe for a potential EU base. Most bankers, for example, had put France near the bottom of the list when mulling any potential moves for those very reasons. A Macron presidency could see that change. But there are two good reasons a Macron win could still be good for the UK in its Brexit negotiations. First, Macron may want to cut taxes and water down workers' rights - but he has to form a government to do it, and may need the support of French socialists who were excited by Benoit Hamon's ideas of a universal basic income and 32-hour working week. His attempts to make France more attractive to business will have to navigate the rocks of coalition building. There have been many attempts to reform the French labour market. I can't think of a single success.
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Brexit effect?