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actually we have just the one data point

1:00

for you all this week. We thought we'd

1:02

unpack it at a

1:04

bit more length than we normally do.

1:06

And that is 25%, which

1:12

is the share of people

1:14

in France who

1:17

trust the Rassam-le-Mone Nacional,

1:19

the far-right National

1:22

Rally Party, or RN, who

1:24

trust them to take the

1:26

best decisions on economic issues

1:28

after the coming parliamentary elections

1:31

this weekend in France. It's

1:35

just called snap elections for

1:37

his country after suffering a

1:39

resounding defeat in the European

1:42

election. Addressing the first

1:44

round of voting in France's parliamentary

1:46

elections, polls indicate that the far-right

1:48

National Rally is still the front-runner.

1:51

This is a party, the far-right RN,

1:53

that has never been in power before,

1:56

but seems likely now to take the

1:59

largest chance. share of the vote

2:01

in the parliamentary election. This is a parliamentary

2:03

election that was not

2:06

regularly scheduled. Emmanuel Macron, the president,

2:08

decided on his own to dissolve

2:11

the parliament and call these elections after

2:14

the far-right party RN came

2:16

in first in European parliamentary

2:18

elections. It's a gamble that may

2:21

not pay off, given the way the

2:23

polls look right now, although how exactly

2:25

that would affect the next government and

2:28

the next prime minister is yet to be

2:30

decided. But with the far-right in the lead

2:33

in the polls, we thought we'd

2:35

take a look at what exactly their

2:37

economic program is and what to

2:40

expect from here. So Adam,

2:42

as I mentioned that poll, which

2:44

was conducted by Ipsos, it

2:47

shows that the French public most trusts

2:49

the far-right with the French economy. And

2:51

I thought I

2:53

would ask what exactly can we say

2:55

about the voter base for the French

2:57

far-right, who exactly is most likely to

3:00

be voting for them? Yeah, I mean on the face of it,

3:02

25% has the top

3:04

score. He's telling you something about

3:06

French politics right now. That really was the top

3:09

score of all of the coalitions. So

3:11

what we're trying to make sense of is a situation

3:13

where the electorate don't

3:15

really, apparently, trust any of the political

3:17

parties. So who is it and why

3:20

are they voting for the parties they're

3:22

voting for? Currently,

3:24

the Rasson-Lumont National is

3:26

polling. Well, in the Europeans,

3:28

it was up for 40%. It's now polling at

3:31

about 36%. And if

3:33

you look at where its

3:35

disproportionately heavy support is coming,

3:38

it's surprisingly, it's not old people.

3:40

So you might think that a conservative

3:43

party would trend towards an older demographic.

3:45

The Rasson-Lumont doesn't. So

3:47

older French people tend to cleave to

3:49

more traditional parties of the conservative side

3:51

or indeed of the left. Or

3:54

in fact, they heavily back Macron's

3:56

remnant, which is called ensemble together.

3:58

It's So it's

4:01

people in middle age, but above all

4:03

in socioeconomic terms, it's

4:05

employees, white collar workers, and people who

4:07

identify themselves in French as au vrière,

4:10

so working class people, manual workers, blue

4:12

collar workers. And we're

4:14

talking about a really big

4:16

mark, skew that direction. If

4:19

in the national polling for the parliamentary elections, there

4:21

are en blements at 36% amongst

4:24

people classifying themselves as au vrière, it's 59%

4:28

amongst employer, so those would be

4:30

white collar workers, it's 46%. And

4:33

again, pensioners, which you might think of

4:35

as a classic conservative milieu, because if

4:37

you like, they're shaped by an earlier

4:39

political culture, tend in fact to be

4:41

more centrist or indeed even left wing.

4:44

Where the raison blement is least

4:47

well represented, and this is also

4:49

highly characteristic of the current situation

4:51

in France, is amongst

4:53

cadres, so managerial personnel, professionals,

4:56

higher white collar workers, people who

4:58

have power and influence in the

5:00

French economy. We can also say

5:03

that the raison blement is

5:05

particularly heavily represented

5:08

in small towns and in rural

5:10

areas. It's pretty evenly spread across

5:12

the country, to be honest. Once upon a time,

5:14

the old national front used to be very heavily

5:16

in the French south, where there

5:19

was a large Algerian migrant population. We're not

5:21

seeing that kind of skew anymore in the

5:23

raison blement. And so I

5:25

think the overall message is that class,

5:27

in a sense, continues to matter in

5:29

French politics, but it's just polarized the

5:32

opposite way that it classically was. I mean, France

5:34

was a country which for a long time, the

5:36

largest single party in parliament

5:39

in the Cold War era was the French

5:41

Communist Party. And it didn't have anywhere near

5:43

a majority, but it was the strongest single

5:45

political formation, because it pretty

5:47

solidly organized a large

5:49

slice of the classic working class, the manual

5:51

working class. That's just no longer true. And

5:54

those votes have flipped overwhelmingly to the

5:57

right. The party of the

5:59

center... Macron's party, the

6:01

white collar managerial class, tends towards

6:03

him. Younger people favor the left,

6:05

and then the left also draws

6:08

support across a wide coalition of

6:10

voters. I'm speaking somewhat

6:12

hesitantly because I'm literally reading off

6:14

the latest set of demographic data

6:17

compiled by French opinion polling agency,

6:19

Elab, which if listeners

6:21

are interested, it's spelled E-L-A-B-E, and it's

6:23

really a great source if you can

6:26

do rudimentary French, you can dig

6:28

your way through these data. I might put some

6:30

up in the newsletter because they're really very, very

6:32

interesting. And this image is confirmed if

6:34

we look at what people care about in the way

6:36

they vote. So we would

6:38

tend, I think, to think of the far-right parties

6:40

when we think of Le Pen and the National

6:43

Front tradition as organized principally

6:45

around the issue of racism and

6:47

xenophobia and migration. And that remains

6:49

if you look across the people

6:52

who identify with parties, one

6:54

of the standout issues for

6:56

loyalists of the far right. But

6:58

if we ask people what they're voting

7:01

on in this election, then

7:03

it's overwhelmingly bread and butter issues. And the

7:05

key one is purchasing power, otherwise the cost

7:07

of living, in other words, the balance between

7:10

wages, welfare benefits and

7:12

prices. And this screams out

7:14

of the data as by far and away the most

7:17

significant issue. After that comes security, which

7:19

could be a blend of issues, crime

7:21

could be mingled in there, where you

7:23

would get the racism and xenophobia mingling.

7:26

But by a margin of 20 percentage

7:28

points, le pouvoir d'achat, so the purchasing

7:30

power of wages, dominates every

7:33

other issue in this election.

7:35

And it really hurts the

7:38

Macronists. So the

7:40

current incumbent government, which is a

7:42

prime minister and President Macron himself,

7:45

are blamed for the difficult times in the

7:48

European economy since Covid. And then of course,

7:50

the cost of living shock in 2223 as

7:52

a result of the energy price hikes that

7:56

that follow through. And the French government actually worked

7:58

higher to try and absorb those. but

8:01

French voters don't buy it. There

8:03

is a profound anti-macron vote in

8:05

here that's very, very powerful. There's

8:08

a lot of French people that just hate macron

8:10

because he is the embodiment of Davos.

8:13

I'm at a Davos meeting in China right

8:15

now, and I believe he was one of

8:17

the young global leaders that this organization picks

8:19

out. He's

8:21

a classic yuppie, what we would once

8:24

have called a yuppie, upwardly mobile professional.

8:27

There was a very large swath of French society

8:29

which really detests the politics that he stands for.

8:31

Yeah, I mean, those demographic

8:33

issues seem to parallel the far-right

8:35

space in other countries as well.

8:37

I mean, generally seems to be

8:39

true of the AFD, the

8:42

AFD in Germany, even frankly, to some

8:44

extent, the Republican Party in the US in

8:46

terms of those class splits and how the

8:49

lower classes are moving coalescing around

8:51

the far-right. But as I mentioned,

8:54

the Rasson-Lemon-Nacional has never been in

8:56

power before. They don't have any

8:59

government experience really to speak

9:01

of. They do, though, have a specific economic

9:04

program that they've developed and that they are

9:06

running on in this election. I was curious

9:09

if you could tell us what exactly that economic

9:11

program consists of. Well, I think if you're looking

9:13

for a distinctively, we're

9:16

talking about a party which has

9:18

post-fascist roots. So if you're looking

9:20

for a movement that was

9:23

selling a kind of

9:25

glossy, ambitious, transformative

9:27

economic program of the far right, I

9:29

mean, it's kind of disappointing. It's not

9:31

there, right? So what it in fact

9:34

amounts to is a sort of grab

9:36

bag of various types of tax giveaway.

9:38

Again, I think your analogy to the

9:40

Republican Party in the current moment is

9:42

quite apt here. Their

9:44

biggest ticket items are things like

9:46

ending value-added tax, which is

9:48

this very heavy tax which European states

9:50

impose on consumers for fuel and energy.

9:52

They made promises at one point of

9:55

abolishing income tax for everyone under the

9:57

age of 30, which may have

9:59

contributed to the to some of that

10:01

youth vote they get. But then at

10:03

the other end, they also have targeted

10:06

Macron's signal standout reform, which was to

10:08

rage the retirement age in France. So

10:10

Macron raised it from 62 to 64,

10:13

and they want to reverse that. So

10:16

in a sense, it looks like a

10:18

bunch of really low, these

10:21

aren't programs with really very

10:23

high programmatic content. They're just

10:25

popular giveaways basically operating by

10:27

the tax and the pension

10:29

system. They were estimated

10:31

by one centrist think the Institute

10:33

Montaigne to run to 100 billion

10:36

euros, which is a lot

10:38

of money. There's no question in relation to

10:40

France's already substantial budget deficit.

10:43

And one of the questions I

10:45

think is, is how serious any

10:47

of this is meant and because

10:49

Bardella, the lead candidate of the

10:51

Rasson-Blamont in this current campaign

10:53

is running on an agenda which is

10:55

quite different, which is to hammer Macron

10:57

with the debt and the deficit issue

11:00

and in the face of pushback and

11:02

anxiety and in financial markets, and perhaps

11:04

with a view also to curry in

11:06

favor with business interests, what we're hearing

11:08

from the Rasson-Blamont is in fact, the

11:10

kind of rollback of their agenda towards

11:13

a promise of stabilizing the

11:15

French public finances of

11:18

bringing the deficit, which is now in

11:20

excess of 5% of GDP to

11:22

the 3% norm, which the EU requires by

11:24

2027. So it's a kind of retreat,

11:28

if you like, of radicalism at the

11:30

moment when they were hoping to be

11:32

riding high in the polls. In fact,

11:34

the polling is a little bit off.

11:36

I think the signs of nervousness here

11:38

about how this is going to work

11:40

its way through. And one of the

11:42

big programmatic issues that was always a

11:44

distinctive item for the

11:46

French right, especially in the Le

11:48

Pen era, was anti- was urophobia,

11:51

was euro skepticism. And if you

11:53

look at the polling of the

11:55

far-right core support, they are distinctively

11:57

sovereignists, nationalists, wanting to bring power.

11:59

back from Brussels to Paris, but

12:01

we're not getting very much of

12:03

that in the current election campaign.

12:06

So all of the, you know,

12:08

the more ideological elements of the

12:11

French far-right's agenda seem to have

12:13

been toned down in favor of

12:15

a weird combination of promises

12:18

to, you know, reduce

12:20

the pension age and cut taxes and

12:23

on the other hand a promise to

12:25

stabilize the budget. So it

12:27

is all beginning to feel a little bit

12:29

like the sort of House of Mirrors economic

12:31

and fiscal policy we're used to from

12:34

the Republicans in the US. That's interesting.

12:36

I mean it does seem also like

12:38

those promises in the

12:40

campaign have resonated with some

12:43

more traditionalist voting

12:45

blocs in France. It's

12:47

noticeable that the French industry, you

12:49

know, seems to consider the far-left

12:51

economic program. So the main competitor right

12:54

now in the election in the election

12:56

polls show that

12:58

the far-left movement, which

13:01

comprises a spectrum of parties

13:03

on the left from the far left to the

13:05

center left, it does seem

13:07

like various French industries seem to consider

13:09

their economic program more dangerous than

13:12

the far-right. And French

13:14

economists have also weighed in along

13:17

similar lines, seeming to describe far-left

13:19

as the bigger danger economically. Yeah,

13:21

I mean how should we make

13:23

sense of these alignments amid the

13:26

campaign? Yes, I think

13:28

the understanding this configuration is crucial

13:30

because the panic in France is

13:32

not really just about the

13:35

right-wing surging. The panic is that

13:37

the alternative is no longer a

13:39

bloc led by centrists like Macron

13:42

but a revived, self-consciously revived,

13:44

popular front. So the reference here

13:46

is to 1936 when a socialist-led

13:51

coalition with communist backing for the

13:53

first time took office in

13:55

France in 36. There had been left-wing governments

13:57

in the 20s but this was the first

13:59

like bonafide. a socialist

14:01

government and introduced really quite fundamental reforms. It's

14:03

like France's New Deal moment and it was

14:06

about as popular on the right as the

14:08

New Deal was in the United States. And

14:11

the nightmare of French centrists and

14:13

French business, and this goes back

14:15

to previous presidential elections, has always

14:17

been that a centrist might

14:19

be eliminated and you'd be left with a

14:21

runoff between a far left and a far

14:23

right. And that's the

14:25

situation that's prevailing in France right now

14:28

and accounting, I think, for the

14:30

sense of panic that you're getting in many

14:32

circles. The left program

14:34

is more programmatic than that of

14:36

the right currently. They plan a

14:38

phased increase of spending, which over

14:40

the period of the full presidential

14:43

term will amount to over 130

14:46

billion euros worth of spending. It is

14:48

directed at the welfare state and green

14:50

measures. So it's a little bit like

14:52

the green New Deal that the left

14:54

wing of the Democratic Party wanted to

14:56

push through. Which on the

14:58

face of it, you would think might in some

15:00

ways be a promising agenda for French business, because

15:03

it would offer the chance for investment and growth

15:06

led by government spending. But the problem

15:08

is that the left is promising to

15:10

cover this with taxation. So

15:13

it really is a tax and

15:15

spend program, not simply a spend program.

15:18

And the taxes they're promising to raise are

15:20

on higher incomes, on

15:22

wealth potentially, and on inheritance tax. And

15:25

this really sends shivers through the French bourgeoisie.

15:27

There are folks talking about nothing less than

15:29

the challenge to the future of French capitalism,

15:32

a truly dramatic talk. What we're really talking

15:35

about is funding 150 billion euros in spending

15:37

by 2027. And yet this

15:39

is being turned into a kind of mythic

15:42

threat to French business at a moment

15:44

when we're choosing between the brains of

15:46

power being passed from a centrist government

15:48

to the far right. And

15:51

what has been really remarkable, and I

15:53

can't pretend that I don't find it

15:55

dismaying, is that several significant French economists,

15:58

most notably Olivier Blanchard, former of the

16:00

IMF, an extremely

16:02

brilliant economist, have actually

16:04

come out publicly, not

16:06

to endorse the right-wing position by any

16:08

means, but to criticise that of the

16:11

left as constituting a

16:13

fundamental threat to French dynamism. Now, you

16:15

can see where they're coming from, right?

16:17

Because if the French business elite is

16:20

saying we're terrified of the left-wing program,

16:22

whether or not, objectively speaking, it constitutes

16:24

a threat to French business, which

16:26

I think anyone in their right mind would

16:29

probably deny. If it breaks what John Maynard

16:31

Keynes called the animal spirits of French capitalism,

16:33

it's bad for investment. So de facto, a

16:35

kind of crisis of confidence in the French

16:37

business community, would be bad for business. But

16:39

this is a blackmail that

16:42

business exercises again and again in a situation

16:44

where you face choices. And the

16:46

choice that France faces right now is extremely

16:48

serious. And so the question is really

16:51

why speak as an economist at all? I mean,

16:53

I think if you look at the context of

16:55

this election and the implications that it has for

16:57

France and Europe, one has to

16:59

say that as important as economic issues are,

17:01

and obviously on this programme we care about

17:03

them, but as important as those issues are,

17:06

they are not the most important issue at

17:08

stake here. And if you

17:10

don't prefer a right-wing victory, assume

17:12

that you don't. Why then, why

17:14

then would you choose to speak

17:16

out in the way that somebody

17:19

like Blanchard has to deliver a

17:21

blow-by-blow critique of the left-wing party's

17:23

programmes? Now his response is,

17:25

look, I'm just a technician and he literally

17:27

uses the phrase, I'm staying in my lane,

17:29

I'm declaring, I'm declaring what I see and

17:31

I'm making my call. But if

17:33

you do that, you can't deny that one of

17:35

the things that you're effectively doing is endorsing as

17:37

a choice the other side's programme, which is he

17:39

says in so many words, like that I prefer

17:41

the assomblement programme to that of the left-wing. I

17:43

don't like either of them, but of the two,

17:46

I had to choose it would be the assomblement.

17:48

And it doesn't seem to me and it really

17:50

is a matter, it's a fascinating challenge. But

17:52

I do think it's a very serious

17:54

matter of responsibility here. Like what is

17:56

the function of narrow expertise and is

17:58

it really really... reasonable to say, well,

18:00

I'm just doing my job as an

18:02

economist in evaluating these programs. Because

18:05

if you don't have some

18:07

sort of further theory about

18:09

why throwing whatever weight you

18:11

have onto the side of the right wing is

18:13

not a disaster, say, for instance, you believe that

18:16

it might be good for them to have a

18:18

taste of the painful responsibilities of power. If

18:20

you don't have that, you should really shut up if

18:22

you do have that theory about it

18:25

being necessary for the right to really

18:27

savor the bitter fruit of responsibility, which

18:29

I think is macaron maybe wagering on.

18:31

But if you do have that theory, you're

18:33

not staying in your name, you're actually in

18:36

the business of wagering on a very high

18:38

stakes political scenario, you're

18:40

actually making a set of

18:42

very serious gambles about

18:44

what is good for French politics. And

18:46

so there's a sort of inherent contradiction

18:48

in saying out of my narrow province

18:50

of expertise, I should be commenting on

18:52

these proposals, because as an expert, I

18:54

have a responsibility to comment. When

18:56

doing so de facto endorses the

18:59

scaremongering of the French business elite. So it's

19:01

I can't deny that I think this is

19:04

a very important test of

19:06

responsibility. And you know, it's very different

19:08

from the position that a vast majority

19:10

of American economists chose

19:12

to take on this on the Trump issue back

19:14

in 2016, where we're an

19:17

overwhelming majority were willing to speak out. Now, in

19:19

this case, you could say, well, this is the

19:21

counterfactual in which Bernie Sanders is the candidate. But

19:24

the stakes are very high. And it does it does

19:26

concern me that that essentially,

19:28

you know, economists are using their

19:30

expertise to outline the alibi, if

19:32

you like the ex post nationalization

19:34

for why the French bourgeoisie may

19:36

end up backing this alarming

19:38

right wing lurch. I mean, to clarify, it

19:40

does sound like you're, you're making this point

19:43

in the context, specifically of an election, right?

19:45

I mean, this is a kind of an

19:47

election is by definition, a zero

19:49

sum affair here. And so it

19:51

is a matter of picking one or the other. Yes.

19:54

And it's an election with with extremely high

19:56

stakes. And if it weren't, I think

19:58

one I would have to make other judgments. But

20:01

I guess what I'm saying is that the

20:03

decision to apply your narrow expertise to a

20:05

problem like this and to make the call

20:07

that way, in fact, implies not

20:10

a narrow expertise, but some meta-judgment at

20:12

the political level, that this

20:14

is a moment for narrow expertise. Because

20:17

if this is actually a kind

20:19

of quite fundamental crisis of the French Republic,

20:21

which I think is a reasonable way, certainly

20:23

that's the interpretation of the French left, holding

20:27

Le Pen's right wing out of power

20:29

has been a central preoccupation

20:31

of French politics for decades. If

20:34

at a moment like that, you simply invoke

20:37

your notional responsibility as a narrowly specialist

20:39

expert to render judgment, you're

20:42

missing the point. OK, so let's

20:45

get into the ideology of France's

20:47

far right. I mean, how does

20:49

the Rassamblement Nationale compare

20:51

with other far right parties in

20:53

Europe? If we were to take

20:55

the IFT in Germany, for example,

20:57

how does the RN in France

21:00

compare? I mean, compared to

21:02

the IFT, the French far right is,

21:04

you might say, it might be tempted

21:06

to say an organic formation. I mean,

21:08

it's grown over time. It

21:10

grew out of a brew,

21:13

a really nasty brew of post-World

21:15

War II influences. There's elements of

21:17

Vichy in there. There

21:19

are also elements of the nationalist conservative

21:22

resistance as well, all brooding together. Then

21:24

there are various types of settler

21:27

colonial, Algerian politics blended

21:30

in. So this is

21:32

a, you might say, like in the

21:34

case of the Fratelli d'Italia, Maloney's

21:37

party, an authentic, or at

21:39

least elements of it, have

21:41

post-fascist roots. And you

21:43

can trace genealogically the origins of this party

21:46

all the way back. The same isn't

21:48

true on the German side. This isn't to say that in

21:50

West Germany, there weren't formations of

21:52

that type, the NDP, the Republicana, kind

21:54

of broadly fitting within

21:56

that tradition. But the AfD is

21:59

a much more recent. it's

22:01

kind of like a pop-up almost far-right party.

22:03

And it was founded in 2013 as a

22:05

hard money, fiscally

22:09

conservative, anti-European,

22:11

anti-Mario Draghi, kind

22:14

of conservative, hard money resistance. There's

22:16

an awful lot of gold bugs

22:19

in the AFD that fear,

22:21

fear money. So government created, state created

22:23

money per se and point the finger

22:25

at the technocrats in Brussels. So

22:28

that's one wing of the party,

22:30

whereas the French, especially Le

22:32

Pen far-right has often dallied with

22:34

various types of right-wing Keynesianism. So from

22:37

a very different, much more authentically

22:39

fascist if you like. Whereas the AFD

22:41

doesn't really have that much DNA

22:43

of that type. And then

22:45

the AFD gathers huge momentum in 2015 because

22:48

of the refugee crisis. And

22:51

in the German case, it's above all

22:54

straightforward Islamophobia, whereas in the

22:56

French case, a

22:58

lot of the racism is anti-black

23:01

first and foremost, and then, or

23:03

anti-Algerian. So it's rooted in the

23:06

specifically post-colonial circumstances of France. Whereas

23:09

the right-wing in Germany is more,

23:11

you know, it's a little bit more

23:13

putinesque if you like. It's a more

23:15

about the fence of Western civilization or

23:17

Christendom against, you know,

23:20

an ill-defined Islamic horde of invaders

23:22

that are going to change German

23:24

society. So it has a

23:26

rather distinctive kind of xenophobia and racism. This

23:28

isn't to say that there aren't just out-and-out

23:30

rouses in its ranks. So this

23:32

makes for a very strange combination. And then

23:34

anti-vax was huge in the AFD ranks as

23:36

well. So you add 2020. So

23:39

first the Eurozone shock, then

23:41

the refugee crisis, and then

23:43

COVID and anti-vax campaigning.

23:46

And you've got yourself kind of a combination.

23:49

One thing they had in common, both Le Pen

23:51

and the AFD was a sort of sneaking sympathy

23:53

for Putin, which

23:55

is powerful on both sides. But

23:58

it means that the AFD's economic- economic

24:00

program is frankly indecipherable at times. I

24:02

mean, I was saying that the French

24:05

Rasson Blomant Nationale has sort of drifted

24:07

into what looks like a sort

24:10

of incoherent GOP republic and kind

24:12

of give away politics. The

24:14

AFT is weirder, you know, because it

24:16

recruits, as you were saying, the

24:19

same sort of voting base, especially

24:21

heavily in East Germany, where there is

24:23

genuinely a left behind population that never

24:26

recovered from the shock of the

24:28

1990s that suffered very substantial unemployment.

24:31

And yet they support a party whose

24:34

leadership in Berlin and in the West,

24:36

notably, is hardcore

24:38

fiscal Austerian, believes

24:41

and heavily supports Germany's debt

24:43

break provisions, which essentially ban the

24:45

national government from accumulating

24:48

any significant amount of debt and actually

24:50

campaigns on this issue. So,

24:52

I mean, I quip sometimes that the AFT

24:55

are so confused, they don't even they know

24:57

they couldn't even be fascists. They can't even

24:59

they can't even add up the components that

25:01

will be necessary for

25:03

a truly proactive national

25:06

socialist campaign. I think

25:08

at the national level, that's right.

25:10

Lower down because it's an incoherent

25:12

and rapidly evolving political organization, it's

25:14

a bit different. At the grassroots

25:17

level, the AFT campaigns like a

25:19

party that's looking for, you know, what

25:21

political scientists in the leftist mode call

25:24

hegemony. So it's trying to build a

25:26

kind of cultural social base. There's

25:28

a kind of communalism of volunteerism.

25:31

And there are bits of the AFT

25:33

that understand the dilemma I'm pointing to

25:36

and say, look, no, if we actually want

25:38

to be a national socialist party. So these

25:40

are tend to be the more extreme bits

25:42

associated with people like Hucker, who

25:44

is the most extreme ideologue and

25:47

a branch within the AFT known as the

25:49

wing, the flugel, and it's the right wing

25:51

of the party. They, I think, are

25:54

trying to push the party in a

25:56

more consistently national socialist direction, given

25:58

the preferences of the German. the electorate, you might

26:01

think that that would be more promising, a kind

26:03

of right-wing new

26:05

deal. But it's not even obvious that it

26:07

would be with their electorate. So it's

26:10

a pretty strange formation

26:12

that neither historically

26:14

genealogically nor in

26:16

its ideology can really claim

26:18

much continuity with the national

26:20

socialism of the 1930s. Okay,

26:23

we're going to have to take a quick

26:25

break right here, but we will be back

26:27

in a second to continue talking about the

26:30

French far-right. This

26:48

show is sponsored by BetterHelp. So

26:51

we are obviously now in the month of June, which

26:54

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slash ones twos. So

28:29

if the Rassam-Laman

28:31

Nationale pulls ahead in this election

28:34

and ends up on top and

28:36

potentially ends up even leading the

28:38

next French government, I

28:41

mean, what are the implications of that kind

28:43

of far right breakthrough in France? I mean,

28:45

could there be a short

28:48

run crisis? And then

28:50

how would that crisis come about exactly?

28:52

Would it be about debt markets? Obviously there's

28:55

a lot of concern about the levels of French

28:57

debt. Is that how a kind of crisis could

28:59

be imposed on France? And would

29:01

that basically be analogous to what

29:03

happened in the UK under Liz

29:05

Truss's government, which obviously collapsed after only

29:07

a couple of weeks in office? Yeah,

29:09

this is a question which again brings

29:12

us back to this ticklish issue of

29:14

the responsibility of economic commentary and its

29:16

politics in a moment like this, because

29:19

in response to democratic

29:21

disturbance in general, right

29:23

wing or left wing governments

29:25

taking power, there is

29:28

a standard kind of playbook for centrists.

29:31

And it was known by the Tory political

29:34

managers, the British conservative political managers in

29:36

the 2010s as Project Fear. And

29:39

in Project Fear, what you do as a good

29:41

centrist is basically to warn that in the event

29:43

of Scottish independence or

29:45

a Greek socialist government or

29:48

Brexit, that the sky will fall,

29:50

the markets will punish you, and there

29:52

will be a national economic disaster. And

29:56

I'm not in a position of actually being in any

29:58

way a serious commentator on French politics, mers... at

30:00

this moment, but everyone who is

30:03

in that kind of position on the

30:05

Macron ranks is doing exactly what you

30:07

would expect them to do. Namely, they

30:09

are saying that Bruno Le Maire, the

30:11

French finance minister, who's a very influential

30:13

figure in European politics, helped to broker

30:15

the deal in 2020 that saw Europe

30:18

through the COVID crisis, has been saying

30:20

there'll be a total disaster. It will

30:22

exactly as you say can be a

30:24

truss British crisis. The Macronist

30:26

prime minister, Gabriel Atal,

30:29

has been pointing to the meltdown

30:32

in the financial markets and economic and social

30:34

carnage, the crushing of the middle class. I

30:36

mean, really talking a little bit like Trump

30:38

carnage is, after all, a word out of

30:40

the Trump inaugural in 2017. And

30:44

the markets have been picking up on this to

30:46

a degree, and it's been bad weeks since Macron

30:49

called this for the French

30:51

stock exchange, for French bank shares in particular.

30:53

The banks matter here because they reflect, if

30:55

you like, the overall well-being of the economy.

30:57

And for French public debt, and what's happened

30:59

there is that the prices have fallen, people

31:01

are selling out of French public debt, and

31:03

as a result, the yields have risen. And

31:06

then you get this thing called the yield spread, which

31:08

is the gap between your effective

31:10

interest rate and that that the

31:12

Germans pay. And the French are

31:14

now in the zone of previous

31:17

Eurozone crisis cases like Portugal. So

31:20

they're under stress. But this is

31:22

a political game that's being played, and part of

31:24

what's going on here is a

31:27

threatening, it's a threatening move to

31:29

invoke. And these markets

31:31

are not automatic mechanisms.

31:34

They are driven by choices made by people who

31:36

have political views, and then they're driven by the

31:38

beauty contest, everyone will try to guess everyone else's

31:41

view. I mean, if you look at

31:43

the structure of the situation, exactly as

31:45

you say, one issue here is debt. France has some

31:47

of the highest debt levels in the EU, 110% of

31:49

GDP. That's a lot

31:51

more than Britain did at the time of

31:54

its mini crisis. Its deficit is big,

31:56

and it's proving hard to reduce that

31:58

deficit under ordinary. circumstances with

32:00

a powerful central bank that was willing to

32:02

cooperate, which was not Britain's situation during the

32:05

trust crisis, because the Bank of England was

32:07

pulling out of the market, it was trying

32:09

to sell US British government debt at the

32:12

moment that the government announced its

32:14

policy. So it was putting pressure on the bond

32:16

markets. If you had a supportive central bank, as

32:19

say the Bank of England was during the Brexit

32:21

crisis, you can come through any kind of political

32:23

turmoil with a supportive central bank if you are

32:26

in the position that say France or Britain is,

32:29

debt-wise, right? These are not real crisis

32:31

cases. The real question is how does

32:33

the Eurozone play this? And

32:35

one line is to say, well, France is

32:37

in the sort of trouble that Greece was

32:39

in once upon a time, or Italy, which

32:41

have much higher debt levels than France does.

32:43

So that's slightly implausible. I think the more

32:45

plausible read is that because it's part of

32:47

the Eurozone, it probably can't have the full

32:49

blown crisis that was really panicking people in

32:51

London during the trust crisis,

32:53

because at that point the pound sterling

32:56

was falling, and then you really begin

32:58

to look like an emerging market where

33:00

a panic takes your currency

33:02

down as people bail out of your

33:04

entire system and your interest

33:06

rates go up. And rather than stabilizing

33:08

the currency, that acts as a signal for

33:10

a further sell-off. That seems really quite

33:12

unlikely in the case of French

33:15

government debt to unfold. The

33:17

ECB, if it had to, would have means

33:19

of intervening. It seems unlikely that that will

33:21

happen. Overall, I think

33:24

much, if you like, as I would like

33:27

to imagine, that there was the wrath of

33:29

God out there in markets that would punish

33:31

ghastly right-wing governments, I actually

33:33

don't think that will appear. The real

33:35

fear would be a left-wing government, but

33:37

that I think is extremely

33:39

unlikely to happen. We're more likely to end up

33:41

with a hung parliament, a lack

33:44

of majority, a lack of clarity. And

33:46

I think that's where then the real

33:48

issues are, not so much an immediate

33:50

panic as a grinding

33:53

European debate about how France can

33:55

or cannot meet the relatively demanding

33:57

new fiscal rules that have been

33:59

in introduce, the European Commission has

34:01

already moved towards disciplinary action, not

34:03

just against France, but a number

34:05

of other European states for having

34:08

too high deficits. This is

34:10

why the Rassombloumont is making all

34:12

these noises about being responsible because

34:14

they know that the next iteration

34:16

of this game is probably not

34:18

crisis fighting, but a grinding effort

34:20

to come to terms with Eurozone

34:22

discipline. And they

34:25

may find themselves a little bit like

34:27

Maloney in the end playing in Italy,

34:29

that is, playing a much more conciliatory

34:32

role than we might have expected of

34:34

a far right government a few years

34:36

ago. So the panic

34:38

talk is there, the panic scenario

34:40

one can imagine in different ways.

34:43

It's clearly not great news for either France

34:45

or European politics that we are moving in

34:47

this direction. But I actually

34:49

think a kind of slow slog, a

34:52

progressive attrition potentially of French credibility which hung

34:54

for a long time quite heavily on the

34:56

figure of Macron and his buoyant

34:59

centrism, that's a more likely

35:01

scenario than a full blown crisis. Okay,

35:05

but then it does seem fair

35:07

to ask about the long term

35:09

implications in the case of a

35:11

far right victory in France. I

35:13

mean, we're talking then about a

35:16

Europe with various far

35:18

right and conservative parties in

35:20

power. This is

35:23

an EU with, as you mentioned, Maloney

35:25

in charge in Italy, the

35:27

leader of a far right party. We

35:29

have elections maybe a year off in

35:31

Germany. That seems likely that the CDU,

35:34

the central right party would be

35:36

taking power and after sort

35:38

of accommodating some of its positions to ward

35:40

off the far right on issues like migration.

35:43

So yeah, what kind of EU are

35:45

we talking about if one of

35:48

the major countries like France is also run by

35:50

a far right party? I mean, what are the

35:52

implications for migration? What are

35:54

the economic implications more broadly for Europe in

35:56

this context? I'm a very long way removed

35:58

now from the world a couple of years

36:00

ago where we had a social

36:03

democratic green, red green yellow

36:06

coalition in Berlin, Mario Draghi

36:08

in Italy, Macron

36:10

in France and a social democratic government

36:12

in Spain. That's one of

36:14

the halcyon kind of days. It's a little

36:16

bit reminiscent of the sort of third

36:19

way 1990s where you

36:21

get a convergence of national politics around the sort

36:24

of center progressive position. We're

36:26

a long way from that scenario now. From

36:29

the point of view of Olaf Scholz, I actually had conversations

36:31

with him in 2018, 2019 and his

36:35

staff and his team and this is their

36:37

nightmare. They feared precisely a Europe

36:39

that was going to drift in this direction. First

36:42

in Italy, France is really the big

36:45

domino for decades. The

36:47

kind of European politics is

36:49

lus de ghast at

36:51

the possibility of a right wing French government

36:53

and Olaf Scholz is actually very unusually for

36:55

him come out of his corner and said

36:58

that he's hoping. It's very lackluster.

37:01

Angela Merkel went to actually campaign for Sarkozy

37:03

back in the day. Olaf

37:06

Scholz is a pine that it would be better

37:08

if a French result didn't result in a far

37:10

right government. That's about as far as he's willing

37:12

to go. I think the

37:14

two key issues, you've already mentioned one,

37:17

one is absolutely migration and one

37:19

would expect a further hardening of what is

37:21

by no means a generous migration policy in

37:24

the current form. Deceivably, the

37:26

right wing parties might be amongst themselves

37:28

better able to agree some sort of sharing,

37:31

some quota program because that's always the issue

37:33

in Europe is do the countries which end

37:35

up being the first recipients of migrants also

37:37

end up as the countries where the main

37:40

cost of their integration and their settlement is

37:42

going to be born or are they divided

37:45

up amongst European countries and this is

37:47

some sort of offsetting compensation agreement. It

37:50

may be the case that this kind of

37:52

political convergence would ease a deal on those

37:54

grounds but it's going to be a tougher

37:56

deal. I'd be surprised if we don't see

37:59

a real... serious hardening of

38:01

the line. Exactly how

38:03

that plays out is difficult to know because it

38:05

does involve a complex European bargain. I think

38:08

the easier thing to say is

38:10

that the coalition

38:12

of forces that tended towards

38:14

the social democratic,

38:17

Christian democratic and green kind

38:20

of consensus. I'm thinking about

38:22

the commission in the

38:24

form that we know it today centered

38:26

on Warsaw of Andalayan after the last

38:29

European elections, which is de facto a

38:31

coalition of Christian Democrats,

38:33

so center right-wing parties, green

38:35

parties and social democratic parties, not

38:38

a formal one but in the figure

38:40

of the Dutch Franz Timmermans. They had

38:42

effectively a red-green alliance inside at the

38:45

core of the commission. That

38:47

version of Europe I think shifts

38:49

really that's no longer

38:51

the version of Europe that we're looking at and so

38:54

one of the main casualties of this

38:56

right-wing drift may very well be the

38:58

green program, the green programmatic of the

39:00

EU, which for a long

39:03

time I think you could say it

39:05

was it was credibly committed to in

39:07

a quite a proactive way but it's

39:09

indicative that the Rassomblum or one of

39:11

its first promises is to abolish you

39:13

know heavy VAT on

39:15

fuel charges which effectively just

39:17

is a you know reduces

39:19

a carbon tax effectively for

39:22

French fuel users. Will

39:24

they drift into an outright climate skeptic

39:26

camp? No, this isn't

39:28

the GOP in that respect. They don't indulge

39:31

in the kind of nonsense that you see

39:33

around the Trump camp around climate. Europe doesn't

39:35

have a domestic fossil

39:37

fuel industry. It has fossil fuel

39:40

majors, France notably Total, but

39:42

they do their business outside Europe. Europe

39:45

itself is not a major fossil fuel

39:47

producer at the global level. There's some

39:49

gas and so on but it's not

39:51

US. There's no tax and temptation the

39:53

way there is in the US. But

39:55

yes I think a move to a

39:58

harder position on immigration and away from

40:00

the agenda is what we should expect.

40:02

Yeah, all this is a reminder for

40:04

me that one of our first episodes

40:07

was after the election of Olaf Schulz

40:09

in Germany three years ago. Remember, we

40:11

sort of did some comparison of Schulz

40:13

and Biden and sort of hopefully, I

40:16

think, compared it to a new

40:18

center left era. But yeah, that's

40:20

very quickly, perhaps coming to an

40:23

end. We'll see how things play

40:25

out next weekend and more

40:27

generally in the months ahead. We do need to

40:30

leave off here for now, though, but we will be back

40:32

as always next week. Ones

40:37

and Twos is written and edited

40:39

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