Share Prices & Company Research


23 May 2017

Man on the move

Andrew Feldhaus, Investment Manager, considers the changing relationships between France and the rest of Europe after the election of En Marche’s Emmanuel Macron.

Considering the political shocks we have experienced over the last six months, perhaps it should come as no surprise that we have seen the election of a previously unknown politician with an unknown party triumph in France.

The message the voters took on board was essentially centrist, but behind this lurks an agenda for reform in Europe. As an unproven politician, Macron will have to contend with the complications of the French political system as he seeks to reassert the partnership with Germany, in which France has, of late, become very much the junior partner.

If he succeeds he will find himself at the centre of a struggle for reform and will have to address the monolithic Brussels bureaucracy. Should we be interested in his success or otherwise? Essentially the answer is yes, as, even out of Europe, a ‘hard Brexit’ or one of several alternatives permitting, we will still be a major trading partner of the bloc for the foreseeable future. So institutional reform, which was argued for but not achieved by the UK government in the run-up to the vote, is vital for a post-Brexit trading relationship.

In the first instance, his absolute priority will be to get the French economy fully functioning again. This will entail the navigation of a myriad of competing interests at all levels of society. If he goes some way to achieving this, then his credentials for a bolder pan-European agenda will be enhanced. Germany would then hopefully accept Macron as an equal partner in the journey towards solutions and, with any luck, far-reaching reform. In all probability this will come too late for the UK negotiations but, post-Brexit, a reformed, outward-looking Europe may be a worthy trading and political partner once we are outside “The Club”.

France is very much known as being anti-globalisation, with a well-publicised distaste for Anglo Saxon free-trade models, which plays well with some sections of the domestic electorate. However, a sluggish economy demands a more expansive policy and a form of economic engagement beyond domestic and even European borders. His current view is purported to be that the European model of collective rights is perceived as being something anachronistic which entrenches a resistance to change, reform and a broader worldview. Given that his skilful campaign led to the defeat of an unashamedly populist candidate, he appears to have some credentials, but perhaps a five-year term is not quite long enough to negotiate such a tricky path within France and a broader Europe. It is said that his self-belief is ‘formidable’ and he will need all of his experience in the world of commerce to gain an advantage. He certainly aims to encourage more enterprise, with growth in new and digital technologies.

With this in mind, perhaps we should welcome the new president, not so much because of what he can do for France, but because of what he may achieve in Europe and what that means for the UK.

Notes to the Editor

Established in 1875, Redmayne-Bentley is one the UK’s largest independently owned investment management and private client stockbroking firms, with 37 regional offices throughout the UK and in the Republic of Ireland.

Redmayne-Bentley has experienced commentators available for comment on personal finance and stock market issues.

Man on the move
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