Past Event

Financial Times – Bruegel Forum: the future of Europe after the French election

The second event in the Financial Times - Bruegel Forum series will look at how the results of the French elections will affect Europe.

Date: May 11, 2017, 12:30 pm Topic: European Macroeconomics & Governance

Video and audio recording


NOTES

On 11 May Bruegel and the Financial Times held an event to discuss the direction Europe is likely to take after the French elections. Guntram Wolff, Director of Bruegel, and Tony Barber, Europe Editor of the FT, had the opportunity to discuss the challenges and opportunities facing France and the EU with Jean Pisani-Ferry, Director for Programme and Ideas of Emmanuel Macron’s presidential campaign.

Tony Barber kicked-off the debate with some remarks on the reactions to Emmanuel Macron’s election. Despite his victory at the second turn, larger than expected and welcome with great relief in France, he warned about the wide domestic hostility, expressed in the substantial ballots for extreme candidates in the first round, to some of the economic reforms proposed in his program. At the European level, he highlighted the differences between the overwhelmingly positive reactions in Western Europe and EU institutions and those extremely aloof in Eastern European governments. In this regard, while the election of Macron will certainly represent a new impetus for a healthier Franco-German relationship to strengthen the Euro area, the pockets of reserve and scepticism coming from the rest of EU should be kept in mind.

Despite these concrete challenges, Jean Pisani-Ferry emphasized the significance of this election. Emmanuel Macron broke with the longstanding tradition of avoiding European issues in a Presidential campaign, due to the internal divisions within both parties. In these elections, instead, particularly in the second round, there were two opposing candidates, with platform defined against or pro-Europe. A novelty for France, but also for European politics itself.

At the same time, the vote crystallized profound divisions within the country (by education level, by location and in particular by personal perception about the future), similar to those emerged in the Brexit vote and the US election. Mr Pisani-Ferry explained that it will be a priority for Macron to address these divides. And given his commitment, he will not speak only to the “happy France”, but will be demanding at domestic and European level to respond to the fears and anger expressed during the campaign.

Regarding reforms, Mr. Pisani-Ferry noted that, even if reluctance was clearly expressed in the first round, the current status quo is politically unsustainable (in terms unemployment level, divide between large and smaller cities, problems of competitiveness). Political capital, both domestically and at European level, has to be invested wisely in reforms that are going to deliver. More generally, given that the risk of facing a more competitive “champion” against openness and integration can not be underestimated (in the future or in another country), redefining the idea of economic openness and open society in a way that is politically more sustainable is a key challenge for the future of European politics.

In response to some remarks by Guntram Wolff on Macron’s public finance strategy and regional policies to tackle the opportunity gap between urban vs. countryside, Jean Pisani-Ferry provided more details on the planned structural reduction of public spending. To allow it, given the available low-interest rate window, the program envisages additional (but temporary) investments for 50 billion euros over the presidential 5-years term to foster the digitalization of public administration and improving efficiency of healthcare system. Regarding the geographical divides (well described here by the Financial Times), addressing the inclusiveness issues created by economic agglomeration will require changes in housing tax, the educational system and the degree of physical and digital connectivity.

Finally, a great part of the debate concerned the European dimension of the program. He made it clear that the agenda will starts at home with solving homegrown problems with domestic policies. “There is no attitude of telling neighbours or telling partners that they should be solving our problems,” he said.  At the same time, the current outcomes of the Euro Area institutional set-up are rather unsatisfactory. In light of this, what is essential according to Pisani-Ferry is a serious discussion about the remaining shortcomings, not only on the few issues on which consensus can be found in the short-term and in particular not on instruments. “There has been a lot of crisis management and last-minute decisions to prevent very bad things happening, but we have lacked a serious discussion”, he noted, “in which we don’t need to agree on everything”. In this regard, the French red lines will be complacency, inaction, dogmatism.

The discussion continued on the consequences of Brexit on the EU budget, the necessary redefinition of its strategic priorities and on proposal about a policy framework to address security consequences of foreign acquisitions (on which Bruegel advanced some proposals).

Several questions from the audience fostered further the debate on European values, the sequencing of flexicurity reforms, the future French position on Brexit, issues related to labour mobility within the Single market.

Event notes by Filippo Biondi, Research Assistant.

Schedule

May 11, 2017

12:30-13:00

Check in and lunch

13:00-14:00

Discussion

Tony Barber, Europe editor, Financial Times

Jean Pisani-Ferry, Director for Programme and Ideas of Emmanuel Macron’s presidential campaign

Guntram B. Wolff, Director

14:00-14:30

Q&A

14:30

End

Speakers

Tony Barber

Europe editor, Financial Times

Jean Pisani-Ferry

Director for Programme and Ideas of Emmanuel Macron’s presidential campaign

Guntram B. Wolff

Director

Location & Contact

Bruegel, Rue de la Charité 33, 1210 Brussels

Matilda Sevon

matilda.sevon@bruegel.org

Read article More on this topic More by this author

Blog Post

We need a broader, greener EU-Turkey energy partnership

Energy is a vital part of the EU’s increasingly strained relationship with Turkey. It’s also one of the areas where there is still a lot of potential to find positive synergies. However, the EU’s strategy is too focussed on oil and gas. We need a broader and more sustainable approach to EU-Turkey energy relations.

By: Simone Tagliapietra Topic: Energy & Climate Date: October 19, 2017
Read article

Blog Post

India’s trade ties with the UK and EU

As EU and Indian leaders meet in Delhi, we look at the figures on trade. The UK’s place in the relationship warrants special attention. EU-India trade has more than tripled since 2000, but UK-India trade is largely static. The shift is especially noticeable for EU exports to India, where the UK share has dropped from 29% to 10%.

By: Maria Demertzis and Alexander Roth Topic: European Macroeconomics & Governance, Global Economics & Governance Date: October 6, 2017
Read article More on this topic More by this author

Blog Post

Catalonia and the Spanish banking system

As tensions rise around Catalonia's independence movement, there are worries about the impact on the Spanish banking sector. Banks based in Catalonia account for around 14% of total assets. Some major institutions are already moving their headquarters to other parts of Spain. However, most Spanish banks have significant exposure to the Catalan market, and all could be caught up in the turmoil.

By: Yana Myachenkova Topic: European Macroeconomics & Governance Date: October 6, 2017
Read article Download PDF More by this author

External Publication

An innovation deficit behind Europe’s overall productivity slowdown?

Reinhilde Veugelers' chapter in "Investment and Growth in Advanced Economies", conference volume of the European Central Bank’s Forum on central banking in Sintra.

By: Reinhilde Veugelers Topic: European Macroeconomics & Governance, Innovation & Competition Policy Date: October 2, 2017
Read article More by this author

Opinion

A Jamaican Germany is good for Europe

After a surprising election result, Europe is closely watching German coalition negotiations. A so-called Jamaica coalition of conservatives, liberals and greens is the most likely outcome, but many fear this will be bad for the EU and the Eurozone. Not so, argues Guntram Wolff. In fact, a shift to Jamaica could be good news for Europe.

By: Guntram B. Wolff Topic: European Macroeconomics & Governance Date: September 29, 2017
Read article More on this topic

Blog Post

Employment in Europe and the US: the EU’s remarkable strength

The common narrative that the US labour market outperforms the EU is not as trustworthy as overall unemployment figures imply. There is a complex interaction between job creation, labour force participation and unemployment. Jobseekers leaving the labour market altogether was an important factor behind the reduction in US unemployment, while Europe’s job growth has been accompanied by increased labour force participation.

By: Zsolt Darvas and David Pichler Topic: Global Economics & Governance Date: September 28, 2017
Read article More on this topic

Opinion

A resilient Euro needs Franco-German compromise

In a piece signed by 15 leading French and German economists, Nicolas Véron lays out a path to a more sustainable Euro. Germany will need to accept some form of risk sharing. France will need to allow more market discipline. But the two countries can find a common vision for reforms

By: Agnès Bénassy-Quéré, Markus K. Brunnermeier, Lars Feld, Marcel Fratzscher, Philippe Martin, Hélène Rey, Isabel Schnabel, Nicolas Véron, Beatrice Weder di Mauro, Jeromin Zettelmeyer, Henrik Enderlein, Emmanuel Farhi, Clemens Fuest, Pierre-Olivier Gourinchas and Jean Pisani-Ferry Topic: European Macroeconomics & Governance Date: September 27, 2017
Read article Download PDF More on this topic

External Publication

The role of international institutions in fostering sub-Saharan Africa’s electrification

With a new commentary published by the Columbia University Center on Global Energy Policy, Simone Tagliapietra and Morgan Bazilian discuss the role of international institutions in bringing electricity to sub-Saharan Africa (SSA). The authors offer a review of global financing initiatives for SSA’s electrification, and conclude that better coordination and information-sharing mechanisms to track the rapidly-changing landscape will be critical to achieve SSA energy access goals.

By: Simone Tagliapietra and Morgan Bazilian Topic: Energy & Climate Date: September 22, 2017
Read article More on this topic More by this author

Blog Post

Global Imbalances

The recent IMF’s External Sector Report highlighted the persistence of imbalances and a switch of imbalances towards advanced economies. We review recent contributions on this topic.

By: Silvia Merler Topic: Global Economics & Governance Date: September 21, 2017
Read article More on this topic

Blog Post

Can roaming be saved after Brexit?

The referendum where UK voters chose to exit the European Union has many unanticipated consequences. One that is gaining visibility in the UK just now is the impact of Brexit on mobile roaming arrangements. How might the UK maintain roaming arrangements with the EU in the event of a hard Brexit?

By: J. Scott Marcus and Robert G. Clarke Topic: Innovation & Competition Policy Date: September 21, 2017
Read article Download PDF

Policy Contribution

Capital Markets Union and the fintech opportunity

Fintech has the potential to change financial intermediation structures substantially. It could disrupt existing financial intermediation with new business models empowered by intelligent algorithms, big data, cloud computing and artificial intelligence. Policymakers need to consider four questions urgently: Develop a European or national fintech market? What regulatory framework to pursue? Should supervision of fintech be exercised at the European level? What is the overall vision for the EU’s financial system?

By: Maria Demertzis, Silvia Merler and Guntram B. Wolff Topic: Finance & Financial Regulation, Innovation & Competition Policy Date: September 15, 2017
Read article More by this author

Podcast

Podcast

Surprising priorities for Europe and China

Bruegel’s Alicia García-Herrero and Robin Niblett of Chatham House discuss a new joint report on EU-China relations. How easy was it to find common ground with Chinese partners? And what should be the priorities for economic cooperation between Europe and China?

By: The Sound of Economics Topic: Global Economics & Governance Date: September 13, 2017
Load more posts