The whole of Europe is watching, dumbfounded, France’s leap into the political unknown. Starting with Germany, our main economic partner. A situation that is all the more difficult since relations between the two countries were already not at their best. Across the Rhine, one of the most respected voices, economist Monika Schnitzer, holder of the chair of comparative economic research at the Ludwig-Maximilians University of Munich, does not hide her concern. Public finances, retirement, migration policy… the president of the group of economists advising the German government dissects the French trajectory, and explains that Germany will have to look for “new allies” in Europe. While she envisages a “further downgrading of the French debt rating”, she nevertheless considers a Greek scenario or a rapid resignation like Liz Truss in the United Kingdom in the face of market pressure unlikely.
L’Express: How do you see these legislative elections In France ?
Monika Schnitzer: Honestly, I am worried. The National Rally is a fundamentally anti-European Eurosceptic party, focused solely on French interests. However, today in Europe we need to work together, and even more today than yesterday given the context of the war in Ukraine and very strong political and commercial tensions with China. To think and want to do the opposite is madness!
I would add that this completely incomprehensible decision by Emmanuel Macron to dissolve the National Assembly reminds me of David Cameron’s choice to organize a referendum on Brexit. Both wanted to tell their people: “Stay with me and support me”. But in both cases, it went very badly, and the situation is much worse today…
You say that, paradoxically, this political crisis is occurring in France while the country’s economic situation is better than that of Germany…
Fundamentally, this extreme vote cannot be explained by the economy. Your country is doing better than Germany in terms of growth, unemployment, inflation and purchasing power. Of course, France is not a homogeneous bloc, and the economic and social situation in rural and peri-urban areas is more difficult than in large cities. In the regions, many companies have disappeared over the past decades, deindustrialization has been severe, railway infrastructure has been neglected, public services, particularly health services, have become scarce. Logically, these residents are more frustrated than those who live in metropolitan areas. But I could say the same thing in the German case.
The extreme vote has other roots. It was not the poor who voted for the National Rally, but a section of the population that is afraid of what it could lose. The feeling of the loss of sovereignty of the nation, the downgrading of the country. The idea – false – also that everything is dictated by Brussels. These people do not understand that it is these common rules that protect us and must even be strengthened. The best counter-example is the United Kingdom, which believed that with Brexit the country would regain freedom. But if British companies want to trade with the European Union and access the common market, they must respect the rules set by the EU.
Unlike Germany, the French budget situation is worrying. Public debt and deficit have largely gotten out of hand in recent years. However, the proposals of the two parties that came out on top in the elections include numerous increases in spending. Is France the new Greece?
No, France is much stronger than Greece. There is no possible comparison. Of course, both the left and the RN have presented very spendthrift economic programs. And what can tip the financial markets is the evolution of the relationship with Europe. An example: the RN promises to reduce electricity exports, hoping to lower energy prices. This is a mistake in reasoning. This will just result in less income for energy producers. All measures moving towards greater independence from Europe will only create more instability. However, if long-term interest rates increase, refinancing the debt will be more complicated, and market pressures will increase. In this context, a further downgrade of the French debt rating is possible.
Can we imagine a “Liz Truss scenario”? The British Prime Minister was forced to resign by the financial markets in 2022…
No, because I do not believe in an overreaction of the financial markets even in the event of tensions. The European Central Bank will intervene, to protect the integrity of the eurozone.
You declared to the Spiegel that Germany will probably have to look for “new allies” other than France if it is led by the RN…
Of course, we must continue the dialogue with France, even if it is led by the extreme right. We did the same with the United States when Donald Trump was elected. But at the same time, we need European partners who are ready to make joint efforts. The problem is that countries that defend interests and goals similar to ours are rare. The extreme right is present in the new Dutch government. In Hungary, Orban has been in power for a long time. In Italy, there is Giorgia Meloni. The PiS may have lost in Poland to a pro-European party, but France, the Netherlands or Italy were the most important partners for Germany when it came to advancing European projects, on foreign policy, the Green Deal, new technologies or even a common defense.
“Seen from Germany, retiring at 64 sounds like paradise.”
The RN claims to make significant savings by limiting immigration. What do you think?
France has problems with immigration, like all European countries. But it is a very complex subject. For example, your country has significant sea coasts. How does the RN intend to prevent the arrival of migrants by sea? The United Kingdom, following Brexit, is now welcoming far fewer Europeans, due to the end of freedom of movement. But there are more migrants from non-European countries, who come as asylum seekers. So there is no simplistic solution to this issue. The United States is trying to build a wall, but migrants continue to arrive.
Demographically, France is currently less in difficulty than Germany, due to a higher birth rate. But you will encounter the same problems as us. We have similar debates here about immigration, but people are unaware of the extent to which our countries have a crying need for workers. I am not saying that we should keep all asylum seekers, and it is undoubtedly a question of better regulating migratory flows. But we must be aware of the demographic challenge that we are facing…
The French, by far, are opposed to all immigration, while refusing to want to work until the age of 64. Is this consistent on their part?
In Germany, the legal retirement age will reach 67 in 2031. From here, 64 looks like paradise. [Rires.] I would like to point out that we must of course ensure that the system is fair to those who have been working since they were very young. But if you do not want to increase the retirement age, you can reduce the level of pensions. People are free to choose…
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