Emmanuel Macron gestures from a car after voting during the second round of the French presidential election in Le Touquet, France (Photographer: Christophe Morin/Bloomberg)

The Miseducation Of Emmanuel Macron

(Bloomberg Businessweek) -- Emmanuel Macron appears to be growing up in public.

Eleven days before his 41st birthday, France’s president—looking uncharacteristically haggard—made a humbling televised apology to the nation as he tried to appease the protesters who’ve dented the country’s economic growth and are threatening to shut down his reform agenda. “I could have made you think I didn’t share your concerns, that my priorities were elsewhere,” said Macron, who’d developed a reputation for imperiousness since he took office in May 2017. “I might have said words that wounded.”

The youngest French head of state since Napoleon, Macron started his presidency by playing host to world leaders at the Château de Versailles, evoking the grandeur of the soldier-turned-emperor and other storied leaders of France. With a newly minted hauteur, he launched into a series of unpopular reforms—and brushed aside the decline in his approval ratings as a sign that he was making tough, strong decisions and getting things done.

You can chart the phases of Macron’s presidency by his historical references. When he thought he might conquer the world, it was all about Napoleon. He took President Trump to see the emperor’s tomb before they had dinner in the Eiffel Tower in the summer of 2017. Now that he’s under siege for his reforms, Macron’s touchstone is Charles de Gaulle, the wartime general and founder of modern France. For his TV address on Dec. 10, Macron sat at De Gaulle’s 18th century desk—complete with the late president’s mementos and war medal—mimicking his predecessor’s rhetoric and posture. “He used all the historical codes French presidents have used when the times required it,” says Jean Garrigues, an historian at the University of Orléans who’s closely followed Macron since the investment-banker-turned-civil-servant founded a political movement called En Marche in 2016.

Few observers were surprised that Macron’s attempts to remake the economy met with fierce opposition in the streets. France is certainly accustomed to violent protests. After all, the nation’s modern identity was formed by the 1789 revolution that swept aside an ancient aristocracy to bring to bloody birth the First Republic. But the vehement revolt of the gilets jaunes—which saw armored cars in the streets of Paris—did catch the all-too-self-assured president off guard. The protesters, who take their name from the yellow vests all French drivers are required to keep in their cars in the event of an emergency, have probably brought about the end of Macron’s imperial phase.

His 13-minute recorded mea culpa was an attempt to reestablish his mandate. Realizing he was vulnerable, the former high school playwright responded by scripting a twist in the national drama. At 8 p.m. on a crisp evening, he appeared on national television behind De Gaulle’s antique desk in his ceremonial office at the Elysée presidential palace. France was riveted, waiting to hear what Macron would say to deal with the convulsion that had swept through the capital and other cities. More than a third of the population—over 23 million viewers—tuned in to watch, more than the number who saw the national soccer team win the World Cup final in July. “It was like watching someone learning to be a leader on fast forward,” says Garrigues. “He’s learning to be humble, to show compassion to his citizens.”

Like so much in the world of politics, Macron’s coup de théâtre was consciously staged and directed—by the president himself. Usually impeccably dressed, he didn’t shave before the statement was recorded. He kept not just his speech but the wide-ranging economic policy measures a secret from all but his closest advisers, according to two people familiar with the process. Ministers made suggestions, but Macron wrote his own script. The fashionable accessories of the wealthy metropolitan elite weren’t on display—his usually omnipresent iPhones weren’t visible; there was no designer wristwatch; no contemporary art hung behind him. “I take my share of responsibility,” he said. The proud president who’d declared “I will go on and on and on” had turned penitent.

But has he learned the right lessons? The mouvement des gilets jaunes is the fifth major uprising to roil France since students ripped up cobblestones to throw at police during protests against De Gaulle in May 1968. On the previous four occasions, France’s leaders backed down and deployed state finances to assuage the situation. Macron proved no different.

The €10 billion ($11.4 billion) spending program that he announced was a volte-face in a budget policy that had been geared toward fiscal discipline. He fast-forwarded spending increases slated for the next three years. A state-funded subsidy of €100 a month for each low wage worker could cost the government as much as €5 billion a year. He’s also scrapped taxes on overtime and raised the lowest pensions. (To accommodate the new spending, Macron had to postpone one of his signature campaign promises: tax cuts for large companies.) As a result, France is likely to breach the European Union’s 3 percent deficit limit next year. Fiscal hawks in Germany are already demanding the EU take action over Macron’s budget the same way it has pressured Italy over its deficit. “That’s intolerable and an encouragement for all deficit sinners,” Hans Michelbach, the senior ruling coalition lawmaker on the German parliament’s finance committee, said in a statement. “The French case is no different from the Italian case and thus shouldn’t be treated differently.” (On Dec. 19, Italy offered concessions to win EU approval for its budget.)

Macron has more to do than deal with the consequences of his budget-busting moves. He’ll need to bolster his new, more humble political identity with actions and consistency. His pugnacious and often tone-deaf first year and a half as president will be hard to erase. From the start, Macron appeared to have bet that by front-loading his reforms he’d suffer a dip in popularity during the first part of his term and recover in time for his reelection battle in 2022 when the benefits of those moves became clear. And so, during his first 18 months, he eased labor protections, hiked taxes on pensions, scrapped housing subsidies and the wealth tax, and overhauled the national rail company. Along the way he came to wear his unpopularity as a badge of honor, and he became reckless with his political capital, convinced he’d win more credit for his refusal to veer off course, regardless of the headwinds.

As a result, warning signs were ignored. Macron’s reliance on a small coterie of advisers and assistants helped propel him to power, but that same closed-circuit system has been hurting his presidency for some time by insulating him from public outrage and fueling his sense of omnipotence. Under siege from voters, the opposition, and some allies demanding that he overhaul his presidential style, he did little to change.

In early November, Macron embarked on an eight-day tour of the World War I battlefields of northern France. He used the trip to warn of the dangers of populism and intolerant nationalism in Europe—rhetoric that burnished his international standing. But French voters in the region weren’t interested in that message. Northern France has been hardest hit by the decline in traditional manufacturing industries. It’s a cold, hard place, plagued by unemployment, low wages, and high suicide rates. The citizens he met didn’t want lessons in history or the importance of multilateralism. They wanted to hear him talk about what he was going to do about the decline in the local economy, about the jobs that weren’t paying them enough to live on, and about the hardship of daily existence outside privileged and cosseted Paris. And then there were the new, irritating speed limits and the soaring gasoline prices that sparked the gilets jaunes revolt less than two weeks after Macron started his centenary tour of World War I battle sites.

On the evening of Nov. 30—just one night before rioters burned cars, looted shops, and clashed with police in the French capital—Le Monde ran a story in which Macron and his wife, Brigitte, explained the thinking behind their redecoration of the 18th century Elysée. The new furniture, the paintings on the wall, and the carpet had been chosen to bring “light inside,” the couple said. “We felt like the Elysée had become a fortress protecting itself from the outside,” Brigitte told Le Monde. Her aide, Pierre-Olivier Costa, said Macron had been present to see every new painting arrive because it “feeds him.” Meanwhile, the most violent extremists among the gilets jaunes were already trying to work out how they could actually break into the Elysée.

For all of Macron’s fresh talk of humility, there are still signs his determination to listen to the voters only goes so far. Macron has refused to cut the one policy that more than any other cemented his reputation as a president for the rich: the elimination of the wealth tax. One senior French banker said even members of the finance industry can see that’s a mistake; 70 percent of French people favor the return of the tax.

There’s also no guarantee that a change of character will change the fortunes of the president—or more significant, the economy. With his self-confidence and his air of invulnerability punctured and his approval rating in the low 20s, there are doubts whether Macron will make good on his pledge to complete his reform agenda. He’s set France’s finances on track for a downgrade, according to Stephane Barbier de la Serre, a strategist at Makor Capital Markets SA in Geneva. The national debt is close to 100 percent of gross domestic product, and interest payments cost €42 billion this year. The economic tailwind that buoyed Macron’s first months in office is fading as global growth slows. The Bank of France’s latest forecast provides a hint: The euro zone’s second-largest economy, it says, will expand by 1.5 percent this year and next, slightly below the 1.6 percent expansion the central bank forecast in September before the protests began. Perhaps most important, polls show that his party could trail Marine Le Pen’s nationalists in May’s European Parliament elections. That would be a severe blow to his authority.

The president has pledged he’ll maintain his most crucial reforms, but uncertainty remains about when—or if—they’ll happen. Macron’s tense relations with unions are threatening to delay unemployment insurance reform. (Labor and business unions are in charge of the unemployment insurance system.) Meanwhile, even more complicated and fraught pensions system reform may also be postponed.

“Remember this is his first job as politician,” Garrigues says. But in the eyes of many French people, it’s not clear whether Macron wants to be France’s president or its national poet. For all the audacity of his vault from presidential aide to president in just two years, he still voices doubts about whether politics is his true calling.

In Buenos Aires for the recent Group of 20 summit, Macron slipped away from high-level geopolitics to meet a group of Argentine writers. He told them that the session was an “enchanted break” from his responsibilities and that he still writes every day and dreams of a time when he can focus on his art. “One day I will be done with all this, and I will come back to the truth,” he said. “But I don’t know when that will be.” Even as he spoke, the gilets jaunes were ramping up their most destructive demonstration.

To contact the editor responsible for this story: Howard Chua-Eoan at hchuaeoan@bloomberg.net

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