France’s new PM in 'precarious situation': French economist Jean Pisani-Ferry

Talking Europe

The nomination of Michel Barnier, a veteran of both French and EU politics, to the post of French prime minister, is “a surprise and a delicate gamble” by French president Emmanuel Macron. That’s according to our guest in Talking Europe, economist and political analyst Jean Pisani-Ferry. He tells Armen Georgian that the new French government will not be able to avoid difficult decisions, especially when it comes to the country’s alarming budget deficit. “We can’t afford to navigate with a short-term perspective,” Pisani-Ferry says.

“Barnier doesn’t have the support of a majority in parliament. He’s been appointed with the promise that the (far right) National Rally will not introduce a vote of no-confidence immediately. And obviously the left is absolutely furious. So he’s in a precarious situation,” Pisani-Ferry asserts. “But from a European standpoint, it’s different. There must be relief in European capitals and in Brussels because Barnier knows Europe. He’s pro-European. He’s experienced. So there is an element of stability.”

But there isn’t likely to be a honeymoon for the French government led by Barnier. “It will have to tackle the issues that are on the table, otherwise not only will the EU object, but markets will object too,” Pisani-Ferry says. “There was not much effort by Macron to rein in public spending. And there was a taboo on raising taxes. Actually, there was a lowering of taxes. The bet was that this would eventually be balanced out by higher economic productivity, and that that would generate revenue. But that bet failed. Businesses actually become less productive; the level is down some five percentage points compared to the pre-Covid trend, which is huge! So Barnier is facing a major adjustment.”

Pisani-Ferry agrees that there is a major challenge in terms of Franco-German leadership in Europe, given the political turbulence in France and the recent gains by the German far right AfD in regional and state elections.

“The Franco-German ‘motor’ may not be over, but it is not functioning at full speed,” Pisani-Ferry affirms. “On both sides, you have a significant lack of leadership. You have a lack of support domestically, that will necessarily impact on the initiatives that can be taken at the European level. That’s a first. Because in the past, each time one of the two partners was weaker, the other was stronger. And now they are both weak at the same time. And so the big challenge for the EU institutions is, can they live without this Franco-German motor?”

Programme prepared by Perrine Desplats, Elitsa Gadeva and Luke Brown