France's Far Right, Burnham's New Britain, and Europe’s Autumn Agenda

Hi, I'm Max Bergman and you're listening to the Euroile, a podcast where we look at Europe through a Washington lens. Hello and welcome back to the Euroile. Before we dive into today's episode, a quick reminder, we're always thinking about how to improve the Euroile and would love to hear your thoughts. Let us know what works, what doesn't, what changes you'd like to see in the future. You can also send us your thoughts and feedback by emailing e@csis.org. That's e@csis.org or finding us on social media wherever you get your podcast. Now, on to today's show. Now, I've been in the summer doldrums and taking vacation, not thinking too much about the fate of present Europe, but Europe will soon be back. It is the middle or late part of August. And so we wanted to have someone come on the show to basically set the scene for what we're looking at in the fall. And in particular, we have French elections. Marie Le Pen, the leader of the farright national party, will be back on the ballot is shaking up the rise of her successor and waiting Jordan Bardella. So the French elections are going to be a major topic. The UK also has another prime minister, Andy Burnham, uh, and is setting a new tone in Downing Street. And the EU has a lot on its plate when Brussels comes back for the fall session. And I couldn't think of anyone better to have on the show than Muchaba Ramen. MIJ is the managing director for Europe at the Eurasia Group, where he leads the firm's analysis and advisory work across the continent. Before joining Eurasia Group, he worked at the European Commission's director general for economic and financial affairs and was also at the UK Treasury. He's one of the premier analysts of European politics and specializing in what's happening in Brussels, the UK, and France, and how Europe has navigated the rise of nationalist parties. In June, he also published a fantastic piece in foreign affairs titled How France Falls to the Far Right. And that provides a great jumping off point. MIJ, welcome back to the Europile. >> Thanks for having me, Max. >> So, maybe let's start with France. There was big news early in the summer. Marine Le Pen is allowed to run in this election. And then she announced that she will run. This was after she was convicted of charges. And so what does this mean? How are you looking at French politics right now? I looked at the list of candidates. I think there's more than 20 candidates for the first round of the election. And just to give a quick overview, France has two rounds. The first round will be in April. That that generally is the sense that French voters can vote whoever their heart desires. And then it comes down to a final two in a second round. So, how do you see this election playing out? What are the things to watch out for? >> So, we have, as you say, Le Pen as a candidate, and I think that's a problem for two main reasons. One, she's a more formidable politician than Jordan Vardella, de facto. Number two, and her young understudy, who was widely expected to have the mantle and run on behalf of the far right in next year's race. So she's a more formidable politician than Vardella and will be a more competitive candidate. That's the first problem for the mainstream parties. Second major problem, her programs a lot more disruptive. Bardella was attempting to Maloneyy, if I can put it that way, the RN's economic program to make it more coherent, to make it a bit more palatable. That's not where Marine Le Pen is. Le Pen is much more ideological. Bardella is young, 30 at the time of the next election, because of his youth, because of his inexperience. He still craved validation, I think, from the establishment. You know, he likes the trappings that the establishment presents. Le Pen has no such desire. She doesn't crave validation from the establishment. Message is she's going to rupture with the establishment. She wants to fight the establishment. So she's more formidable and more competitive as a candidate and the program is more disruptive and for that reason I think the race is going to be the most consequential since the Second World War. Now Le Pen is at 35 36% in first round polling. That means there is a 100% probability that she will place first in round one and will occupy one of the two slots in the second round in the runoff. The only question is who her challenger will be. And that's where from September to February, the most decisive phase in the race, it is going to be very important to assess whether the center can unite around a single candidate. That's the single most important thing to watch in the context of this race. Can two former Macrona prime ministers Gabriel Atal and Edward Phipe ultimately coales around a single individual either one of them or you know a figure of providence an unknown unknown someone that we currently don't see on the landscape to galvanize the center enable them to enter the runoff and challenge Le Pen if that doesn't happen if the center remains fragmented and by next February No individual candidate is pulling away from the other. That creates the risk that the hard left renegade Jean Luke Milan who's only a couple of points behind Phipe in first pole. Last time I checked, Philipe is on 1918. Milan Sean's on 1516. That creates a space and a context for the hard left to get through. And that's the worst case scenario for market participants for Europe for mainstream parties that you have a French presidential election defined by the hard left and the far right because in those circumstances Le Pen wins she's in the Elise palace and she begins to implement her disruptive program. So does the center galvanize coales and organize around a single candidate? If so, is that person credible enough to challenge Le Pen? There some of the things I'll be watching when we come out of the summer. And one of the things that sort of makes this difficult I I think on the left there is sort of a primary for some of the left primary or left parties >> but it's sort of very jumbled and you know maybe you could go back to 2017 and Mcronone's rise because and there wasn't quite similar dynamic but McRone sort of came out of nowhere in some ways or an insurgent candidate that kind of broke was basically a two-party system. When you're looking ahead at the fall, do you think we're going to see a lot of movement here where someone will sort of break through, emerge, become kind of the alternative and that there'll be a lot of tactical voting in the first round? So, in my intro, I was like, oh, you vote your heart in the first round. Well, if you're concerned about Melanch definitely losing to Le Pen, then maybe you vote for a centerright candidate that would just you would never vote for normally because you're viewing the first round more like the second round. How do you see this sort of playing out this political jump ball? >> Right. So I think ultimately what's going to happen is the field is going to thin know and we will see that running into the first round. Many of the candidates will drop off after the summer. many are going to be cannibalized or ultimately withdraw between September and February because the numbers just aren't catching up with the leading mainstream candidates. I think the key thing to watch is whether Edward Phillip, who is the default candidate, does a combination of opinion polling, his performance at the various campaign rallies, his ability to present himself as a president, political endorsements from across the spectrum. Does that combination of things result in momentum that gives him a lead that then forces a tal and others to row in behind him including from the center left and even some LR adjacent figures given retio I don't suspect his numbers are going to increase in a meaningful way and so the incentives for not just the three bits of the macron middle but also the center left and the center right are going to be framed by whether where there is a perception created around a single candidate who is seen to be the best chance mainstream parties have of beating Le Pen and so the key question is can Philipe deliver and develop that momentum and you know there's a chance he will there's a chance he may not you know Phipe is he has certain strengths compared to the other mainstream candidates he is experienced has been Macron's prime minister I think three occasions he has been the mayor of Lavra his base for 16 years he wasn't made by Macron he came from the center right and was ultimately co-opted by Macron Gabriel is a creature of Macron he was completely made by Macron he looks like him he dresses like him he sounds like him he's a creation of a very unpopular president Philipe has more distance. He has credible governing experience. He was popular. He has his own thieftum as I've said. And so I think Philipe is the strongest candidate, but he is still associated with Macron. And he lacks something very important, which is killer political instinct. You Philipe is a nice guy. He's not ruthless. And that's the question. The RN is running a campaign based on emotion. Philipe is running a campaign based on intellect. And so, is that going to work to galvanize enough voters to make sure he is the clear breakaway favorite that everyone then rose behind? You're right that the left is in a total mess. They're going to hold a primary. The primary is probably throw up Gluxman as the candidate. The problem is Glutzman has no broad appeal outside the Parisian elite and he's not a credible challenger either for the emergence I think for the mainstream parties or indeed to take on Le Pen France has done the smart thing which is effectively to say I'm not going to be a part of this process you guys are stuck you're doing something that doesn't make sense come and find me in December if you need me which I suspect may happen because the left is going to remain stuck sub 10% and at some point they may say, "Oh, this process we've ellighted upon isn't going to throw up a candidate that's capable of either placing second in round one and challenging Le Pen and so maybe we need to do something different and Hon may seek to insert himself independently in the race depending on what happens to his opinion polls between let's say now and the end of the year. But I think the left is basically in a mess. The LR, as I've said, isn't going anywhere. And so the key question is in that macron can something emerge you know the problem is there is no chain of succession from macron to a successor. He didn't build a political party given all of these individuals come from different political parties. There is no agreement on a meta primary to narrow the field. So the judge and jury for who emerges is going to be the opinion polls and they may manifest quite late in the day when Le Pen has got an even more compelling lead than the one she enjoys today. You know, when I have looked at French elections in the past, it's sort of like, well, if whoever from the center, left, right, whoever emerges, that's the alternative to Le Pen. If they win, well, they will win the election because, you know, Le Pen sort of has this 40% 45% ceiling. But in recent polling, she's outperforming the other centrist candidates. Let's just sort of fast forward. There's a centrist. Maybe it's Edward Phipe, maybe it's a tall, but whoever emerges, do you think this is going to be a real sort of Americanstyle 5050 election, or is there really still kind of an inbuilt 6040 against the farright in France? I mean, that's what it seemed like in the legislative elections that occurred where the 60% could not really form, you know, like disagreed on everything except the fact that they hate the far right. So, how do you see this fast forwarding to a second round? >> Right. So, I didn't think Le Pen could win in 2017. I didn't think she could win in 2022. I do think she can win in 2027. I think Le Pen once she is through the first round will pick off some of Jeanluke Milan Sean's voters, assuming it's Edward Phipe or Gabriel Latal or someone else from the center that she'll pick off some hard left voters because in many areas of substance actually the hard left and the farright programs overlap. She will pick off some extreme right voters from Eric Zamore who will also flail out of the race. She will pick up some LR adjacent voters and she will pick up as a result of abstensions a bit more support and then she's going to run a campaign that basically says look in 2017 Macron fooled you. He said he was going to take on the establishment and he's done nothing but give you managed mediocrity from the center which has effectively been a fact of life for much of the fifth republic. And I think that's a compelling campaign story. She's going to say Macron tricked you and he has given you nothing but political chaos and economic stagnation. And she's actually not wrong. You know, Macron compared to what he promised in 17 domestically has been a failure. Like he has been a failure. The economic story is going backwards. The public finances total mess. Unemployment reversing. His landmark reform in his second term. Pension reform has been unwound. Major strategic error to call an early election in the aftermath of European elections in 22 that resulted in a minority government. that's created legislative gridlock and hasn't been able to do anything like the country is going backwards and Macron has done little but deliver the kind of poor managerialism that also define the life of his incumbents. So Le Pen has a super compelling narrative and there is absolutely a sense across the country that her time has come. She's gone through a really weird and difficult relationship with the French electorate. Now she's popular. You know, people describe her as a battle granny, as a miraculous survivor, as the mother of the nation. There is a real sense that this is her moment and she is formidable. You Philipe, I think it's a catch 22 for him. Her entry into the race is good for him because it seniorizes the race and it makes the center recognize given she's credible and experienced and a big political hitter, they need someone credible, senior who's also a bigger political hitter and that favors him versus. So running into the first round, it increases the likelihood he'll be the mainstream candidate. But in the runoff, it's a disadvantage for him cuz Bardella would have been a much easier candidate for Philippe to beat. Le Pen will be a more difficult candidate. So I think, you know, she's at 35% when you account for all the redistribution of votes that will work to her advantage going into round two. I think, you know, she's probably 6 7% shy of 50% plus one. It's not a big number. Can she get there? I think her weakness is she's lazy and she's not good at policy and the economic platform is a total mess >> and that will come under scrutiny in the second half of this year. My instinct is she's not going to want to make the program more coherent and so that scrutiny is going to raise and level questions about her competence that may work against her. But Max, in answer to your question, you know, we've built a full election model and we have a half a% difference between Phipe and Le Pen in Philip's favor running into round two. That tells you while her victory is not probable, it really is possible. I think that's right. I think it's a really close run thing. It does feel that French elections have sort of become in some ways similar to US elections with a farright [laughter] and then a messy everything else and that Democrats are about to have a primary next year. We'll see what comes from that. But let's maybe transition to the United Kingdom, a new prime minister. The vibes seem to have very much shifted. lots of focus on devolution on sort of as someone who's strongly in favor of strong national capitals you know being a good Washingtonian I kind of disapprove of Burnham wanting to take powers out of London but maybe you could talk about what is the agenda what is the plan how do you see Burnham coming onto the stage and what challenges does he face >> this is clearly an upgrade from the previous anan regime he's a more formidable political communicator he's a lot better at the retail politics than starmmer The political team in number 10 is more experienced people like James Pernell, his chief of staff, and others that were ministers in the previous Blair Brown government from 97 onward. And so it is a more political and a more competent team than what came before and you're seeing that reflected in the opinion polls. They've been helped by Farage and the Binface by election, big on go by reform. They're obviously in a moment where there is internal conflict within reform itself between the team that created the reform as well as the defecting Tories that are now in reform and they have different perspectives about the direction of the party and what to do over different bits of policy. Well, I should just jump in quickly because people may not know Binface, but Nigel Farage, he was under investigation in parliament. To stop that investigation, as I understand, he resigned. There will be a bi-election. He expected to win and that be sort of affirmation that the people don't care about the stupid investigation. It was stupid in air quotes. No one ran except for space alien comedian Binface who I runs all these sort of major elections. >> Raj has won but you know now that he has won I mean he delegitimized himself. He's been arguing with the bin over the last four weeks and the investigation into party funding. You know Farage has taken money from a set of crypto billionaires all very opaque. there is a a bad smell around some of this funding that is going to continue and that will and has I think cost him support. You know, reform is going backward in the polls. Labour now has a slight lead because of the burn and bounce. And so there was a lot of talk I always thought this this was overdone you know about the fragmentation of our political land party landscape and the end of the duopoly. Actually, you know, Kenny Badeno is also getting a bitter for hearing now because the party is having lost some of the right to reform, able to cohhere around more One Nation, Tory, mainstream policy propositions that are also beginning to win an audience with big business. They're worried about the trajectory of the Labor Party moving in the direction of the soft left. And so maybe the duopoly actually is back. And what we will see in 2029 is a more robust contest between Labor led by Burnham and a kind of recovering Tory party under the leadership of Kemmy Beno. She has clearly gotten better at the job, got better at communicating, got better at delivering her messages, and she is winning an audience and is more interesting to people today than she was a year ago when there were major questions about her leadership. on Bernham's agenda. He's a big departure from starism in two or three main ways. You've talked about devolution. This is his vehicle through which he hopes to deliver growth. Basically building on the model in Manchester where the local authorities partnered with the private sector. They were able to deliver growth. Some of the fastest growth in the UK compared to other cities and regions. He believes that's the template. For other parts of the country, number 10 north is going to be the vehicle through which that growth agenda is moved forward. I do think we will see fiscal devolution. They're going to give a share of income tax, maybe business rates to local may authorities. So, it's not just more decision- making power. It's actually decision ability to take spending decisions away from you'll understand being a European the principle of subsidiarity. you take decisions at the local level closest to where they have most impact. I think we're moving over the medium and longer term to that sort of model. Electoral reform another big departure from starrisism. This is something Bham said he was interested in. It's one of the reasons why in the bi-election he faced in order to enter parliament. The Greens didn't place a competitive they didn't run a competitive camp proactive campaign because there is this commitment by Bernham's people to consider electoral reform and to think about progressive blocks rather than individual parties. They will commission a study that will assess I guess implications of different changes to the electoral system and the impact that will have on the vote in 2029. Maybe they'll move that forward, maybe they won't, but that's absolutely something they're looking at. And then I think another big area that he has decided to invest a little political capital on is on social care and trying to reform our social care system. So look, you know, I think it's to be seen. The big question still is, you know, the fiscal constraints remain the same. The fiscal rules, the government is constrained. They can't borrow more. They can't tax much more. The spending settlement for White Hall department's very constrained. There isn't a huge amount of growth. What can these guys do to get the UK economy growing? I know, you know, Europe is an area of interest obviously for people like you and me. I don't think there'll be a big move this side of the election, but I'm becoming increasingly convinced that there may be a manifesto commitment to the customs union or the single market for the next election. So, if they win a mandate, maybe that's what they then do. The kind of gangster move here for Burnham if they wanted to do something compelling would be to go to Europe at the end of the year when we have our reset summit and say look guys this is what I'm thinking for 2029 assuming I win a mandate to do a customs union or a single market. Let's begin to think about what we'd need to do between already now and 2029. Like we're going to build a treaty. Can we begin to do things today that would mean from 29 there's less to do on the other side of the election because we've done a lot on this side of the election but you know that would require in ingenuity courage etc and I'm not sure given the domestic focus of this administration whether they're willing to expend that kind of level of political capital and take that risk but to be seen. I see that would be fascinating because then you sort of have teed it up for voters in the election and in some ways soft vote for rejoin. Maybe we could just shift very quickly in our final sort of 5 minutes here to looking ahead of what's going to be happening at the European Commission. There's been a lot of talk about getting tough with China. What is on the agenda this fall? Do you see more sort of you know draggy report sort of I wouldn't say coming back from the dead necessarily but implementation what do you think is going to be kind of the animating issues that the commission is going to work on this fall >> so kind of max my view second half of the year the US ironically is becoming the more stable part of Europe's external environment not stable but more stable there's a set of issues that will need to be worked through on trade this US investigation into European tech regulations in response to the commission finding Google under the digital markets act. There's Greenland issues. There'll be some friction around Ukraine and so on and so forth. But I do think the relationship has become more bounded and a bit more productive. Where there is a major problem for Europe is going to be in its dealings with Russia and China. Because compared to the US, both Russia and China have strong incentives to escalate and confront Europe rather than negotiate over the next few months. And I'll just quickly unpack what I mean. Russia, I think, is becoming more dangerous because it's becoming weaker. There's a major problem internally within Russia that starts from the fiscal picture that is basically Putin running out of cheap and politically painless ways to finance the war. They have this deficit target of 1.6% of GDP for the year. They blew through that earlier in the year. They're now at about 2.8%. That number keeps heading north. They can't tax more because the non-defense civilian parts of the economy are close to recession. There's only so much civilian spending you can cut. They can't borrow more because market financing is becoming much more expensive. Even the central bank isn't cutting interest rates as much as they were signaling because fiscal policy is too inflationary and too expansionary. This is all a long way of saying the fiscal picture is a major problem because by the finance minister's own admission they need another 2 to three trillion rubles to finance the war by year end. And so the question is how is Putin going to generate the financing he needs to keep sustaining what he wants to sustain on the front line where as you all know you know Russia's operational goal is to try to win Katosk and Slavians and through winning the remaining cities in the Dombas create pressure on Zalinski internally within Ukraine to to undermine him in the hope that will result in his removal which has been long-standing goal of the Kremlin. in. So given the economic picture is challenging and gets more challenging next year, what is Putin's incentive? I think it's to try and bring the war to a conclusion more quickly and on its own terms. And how does it do that? It does it through escalation. And so I think we are heading in Ukraine and against NATO into an escalation cycle from Russia. And you're already seeing that. We will see it in Ukraine through the winter where Russia tries I think to break Ukraine's civilian morale, its economy, the infrastructure and Ukraine also, I think, will have incentives to escalate running into the winter. I think both parties emerge weaker after the winter and I think that creates the conditions for a potential partial ceasefire in 2027. But I think Russia EU relations absolutely escalatory trajectory for the remainder of the year. I think it's the same with China, right? Europe has basically come to the conclusion China's not competing fairly. That debate, I think, is settled. The debate in Europe now is how far do we go to address unfair Chinese competition. China's come to a very different conclusion. They think our economic security agenda in Europe is about constraining their growth. And so, they're moving from unfair economic competition to economic coercion. And I think the nature of that conflict actually looked quite structural to me. Because China is not going to give ground on the things Europe wants it to give ground on. So the exchange rate and over capacity and industrial subsidies and the export surplus. China is not going to negotiate those things away. They're central features of its economic system. And Europe is not going to give up on its economic security agenda of the Industrial Accelerator Act. We have the cyber security act. There's an investment screening mechanism that's in the legislative pipeline. All this stuff is in trialogue in Brussels. We've got the new over capacity instrument that's due to be unveiled by the commission in the third quarter. The October European Council will pick up the mandate from June where leaders want to see a step up and acceleration use of existing instruments to counter unfair Chinese competition. So Europe isn't going to get ground in the areas China wants it to. Put those two things together. I think EU China relations are heading also on a escalate trajectory. So I think watch China, watch Russia. These are major problems for Europe. I think that they're going to dominate the European conversation in the second half of the year. Mitch, that's a great tour to horizon as we start the fall semester. Really want to thank you for walking us through the French elections, UK war in Ukraine, as well as what's going to be on the agenda in Brussels. Welcome back to your first week back in the office. Thanks for joining us and we'll we'll have you again on the Euro File. >> Thanks again for having me, Max. [music] That's it for today's episode. As always, if you enjoyed the show, please subscribe and leave us a review wherever you get your podcast. You may also be interested in our sister podcast, Russian Roulette, which covers the latest on Vladimir Putin's Russia and the ongoing war in Ukraine. Our thanks to our producers, Shannon Young, Otto Spencson, and Lexi Lifelter for coordinating and researching this episode. We'll be back soon with another assessment of Europe through a Washington [music] lens. Until next time.