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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: In French, President Emmanuel Macron, a confident establishment leader, is

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Speaker 2: under siege from a populist right, a movement he calls

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Speaker 2: a shocking disorder in the country, a.

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Speaker 3: Disorder jiju kieta.

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Speaker 4: City.

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Speaker 1: And just last week he scheduled a surprise vote to

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Speaker 1: settle domestic problems, a decision he called serious and heavy.

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Speaker 3: So this is young Lord anacto.

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Speaker 4: Do confience?

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Speaker 1: Macron's unexpected move to dissolve the country's parliament and call

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Speaker 1: snap elections is giving European officials flashbacks to Brexit.

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Speaker 5: We are approaching one of the biggest decisions this country

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Speaker 5: will face in our lifetimes, whether to remain in a

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Speaker 5: reformed European Union or to leave.

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Speaker 1: You might remember that vote was triggered by former UK

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Speaker 1: Prime Minister David Cameron, who called for and lost a

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Speaker 1: referendum on membership in the European Union back in twenty sixteen.

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Speaker 5: Three years ago, I committed to the British people that

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Speaker 5: I would renegotiate our position in the European Union and

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Speaker 5: hold an inout referendum. Now I am delivering on that commitment.

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Speaker 5: You will decide and whatever your decision, I will do

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Speaker 5: my best to deliver it.

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Speaker 1: Now summer wondering if Macron has made the same mistake.

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Speaker 4: There is now a whole vision of a kind of

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Speaker 4: Brexit style crisis that will plunge France into kind of

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Speaker 4: gridlock and take a long while to sort out.

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Speaker 1: Leonel Laurent is a Paris based columnist for Bloomberg Opinion.

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Speaker 1: He's been following the past week's tumult in France and

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Speaker 1: across Europe.

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Speaker 4: So really everybody was expecting twenty twenty seven, the next

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Speaker 4: presidential election, to be the big next timeline, but what

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Speaker 4: happened was European elections came in between.

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Speaker 1: This was supposed to be a relatively boring election for

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Speaker 1: members of the EU Parliament, but the result was not boring.

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Speaker 1: Marine Le Penn's right wing National Rally Party got more

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Speaker 1: than thirty percent of the vote and gained twelve seats,

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Speaker 1: and that led Macron to call for a snap election.

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Speaker 4: And since then it's been absolute chaos. We had the

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Speaker 4: incredible sight of the head of the Century Party announcing

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Speaker 4: an alliance with the far right with main Penn junaios

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Speaker 4: Estan nu Men, only for his own rank and file

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Speaker 4: to turn up at his office and demand he leaves

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Speaker 4: and be physically turfed out of the party, while he

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Speaker 4: barricaded himself behind the door and refused to come out.

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Speaker 1: And France wasn't the only country to be rocked by

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Speaker 1: the results. In Germany, the far right also made shocking gains.

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Speaker 1: The Alternative for Germany Party, also known as the AfD,

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Speaker 1: won sixteen percent of the vote, more than German Chancellor

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Speaker 1: Olaf Schultz's Social Democrats. I'm David Gerret and today on

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Speaker 1: the big take, why Europe is shifting to the right

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Speaker 1: and what that means for everything from the war in

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Speaker 1: Ukraine to the US presidential election. It seems astonishing given

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Speaker 1: all that's happened in recent days, But it was just

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Speaker 1: a few weeks ago that Bloomberg editor in chief John

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Speaker 1: Micklethwaite sat down with French President Emmanuel Macron, and during

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Speaker 1: that conversation, Macron touted all he'd done to transform France's

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Speaker 1: economy since he was first elected in twenty seventeen.

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Speaker 3: We delivered a lot of reform. Since the very beginning

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Speaker 3: twenty seventeen, tax cuts fled, tax on capital gains. We

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Speaker 3: decreased from thirty three point three to twenty five percent

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Speaker 3: copport taxes with inflation war In Ukraine, we passed reform

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Speaker 3: and on pension scheme and unemployment mechanisms. I don't see

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Speaker 3: a lot of countries around us having done so.

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Speaker 4: So you don't just want to be compared to Europe

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Speaker 4: to you, no, no.

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Speaker 3: No, My point is just to say we delivered, we

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Speaker 3: do deliver, and we will deliver.

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Speaker 1: Now that economic success story is in danger of being

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Speaker 1: overshadowed by Macron's political gamble. I asked Bloomberg opinion columnist

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Speaker 1: Lionel Laurent just what had changed. So the last time

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Speaker 1: we spoke was about a month ago. It was right

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Speaker 1: before our editor in chief sat down with the French

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Speaker 1: president Manuel Macron, and in that interview it all seemed

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Speaker 1: pretty rosy. What has happened in the last month.

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Speaker 4: So I would liken it to if you're playing a

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Speaker 4: board game and you're losing, and instead of playing it

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Speaker 4: through to the end, you flip the table and fit

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Speaker 4: the board and see what happens. He's decided that instead

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Speaker 4: of waiting till twenty twenty seven for the presidential election,

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Speaker 4: instead of fighting the long difficult fight to win voters back,

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Speaker 4: he's decided just to simply accelerate the whole process and

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Speaker 4: if the French vote against him, Let's say, if he

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Speaker 4: loses the election, then there'll be two years of chaos

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Speaker 4: and gridlock that will somehow hurt the Penn's chances of

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Speaker 4: becoming president, or he wins, in which case he can

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Speaker 4: say I did the ultimate gamble and I won't.

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Speaker 1: It doesn't seem like so far investors have appreciated that gamble.

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Speaker 1: Last week there was a sharp sell off that saw

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Speaker 1: the value of French stocks fall by more than a

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Speaker 1: quarter trillion dollars. That's led Paris to lose its spot

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Speaker 1: as Europe's biggest equity market to London less than two

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Speaker 1: years after winning that title.

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Speaker 4: I think the risks that markets are waking up to

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Speaker 4: now isn't that it's a choice between mac Horn the Penn.

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Speaker 4: It's that actually the choice for the French when it

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Speaker 4: comes to voting will be between a block that includes

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Speaker 4: the far right and a block that includes the far left.

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Speaker 1: French voters are set to head to the polls on

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Speaker 1: June thirtieth, and there will be a second round of

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Speaker 1: voting on July seventh. According to the latest polling Lepen's

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Speaker 1: National Rally party is in first place, on track to

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Speaker 1: win nearly a third of the vote in Macron's Party

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Speaker 1: Trail's National Rally and the left wing New Popular Front.

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Speaker 1: Either of those two blocks would potentially want to roll

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Speaker 1: back the suite of economic reforms Macron has pushed through

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Speaker 1: since he's been in power, and it certainly would jeopardize

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Speaker 1: other policy priorities, including pension reform. Len Now, how much

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Speaker 1: of a surprise was this for you, somebody who follows

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Speaker 1: European politics closely, that you had the success that these

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Speaker 1: parties had in this recent European election.

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Speaker 4: I think with the European election it was pretty predictable.

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Speaker 4: I think with France you still have trouble explaining what's

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Speaker 4: going on. Even someone who's living right up, pressed up

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Speaker 4: against the window, who's seen La penn progress and progress

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Speaker 4: and progress and progress, it is still very hard to

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Speaker 4: explain what's going on. There are so many slices to

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Speaker 4: this right. There is a sort of disconnect, let's say,

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Speaker 4: in France, between Paris and the rest of the country.

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Speaker 1: That disconnect helps explain the success of the far right.

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Speaker 1: According to Lionelle, it seems that in France, like in

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Speaker 1: the United States. No matter how positive the economic data

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Speaker 1: may be, the economic vibes are bad.

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Speaker 4: If you look at how well off people are I

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Speaker 4: mean France, think about France's social model, Think about the

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Speaker 4: money thrown at the French during COVID, think about during

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Speaker 4: the inflation shock, France was doing everything it could to

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Speaker 4: basically protect consumers from price increases. It still doesn't seem

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Speaker 4: to have worked, it doesn't seem to have sunk in.

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Speaker 4: People still feel like they are worse off and they

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Speaker 4: won't change. It's almost like the entire system is set

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Speaker 4: up to have the French end up disgusted and fed

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Speaker 4: up with the people in power.

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Speaker 1: Even still, Leonelle says, there is no single explanation.

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Speaker 4: I still struggle with to really explain simply why Lapen

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Speaker 4: is where she is in terms of the numbers.

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Speaker 1: This campaign ahead of the snap election is set to

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Speaker 1: last for just a few weeks, so we.

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Speaker 4: Have a campaign that is very short compressed, Yes, is

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Speaker 4: very compressed, and so what that fundamentally means, and this

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Speaker 4: is also part of the gamble, It's that there really

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Speaker 4: isn't going to be much time to really clarify and

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Speaker 4: get into policy, and that's been the kind of strength

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Speaker 4: and the potential weakness of a politician like my In

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Speaker 4: a penent, no one knows what she stands for. It

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Speaker 4: is almost content free. So the idea was to simply say, well,

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Speaker 4: let's see what happens. Meanwhile, of course financial markets are

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Speaker 4: taking fright. That might cause a different reaction, but for

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Speaker 4: now the tactic really has been try and find alliances,

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Speaker 4: stay firm and see what happens.

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Speaker 1: Coming up after the break. The reasons Europe is shifting

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Speaker 1: right word and what that could mean for centrists not

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Speaker 1: just on the continent but around the world. The results

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Speaker 1: of last week's EU elections didn't just see more of

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Speaker 1: France's seats go to far right politicians. Far right parties

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Speaker 1: in Italy, the Netherlands and Spain also saw notable gains.

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Speaker 1: And then there were those Germany results, which saw the

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Speaker 1: worst showing ever for German Chancellor Oloff Schultz's Social Democrats,

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Speaker 1: But unlike Macrn, Schultz dismissed demands to call a snap election.

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Speaker 1: Bloomberg opinion columnist Lionel Laurentz says that didn't mean the

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Speaker 1: electoral outcome there was any less shocking.

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Speaker 4: For Germany to have a far right party scoring well,

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Speaker 4: even if it's not top. For me, it's just kind

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Speaker 4: of incredible. I really didn't think we'd be in this situation,

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Speaker 4: but we are. And also to have this party will

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Speaker 4: have rough edges still say things like, oh, well, maybe

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Speaker 4: not everybody who wore an SS uniform was all that bad.

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Speaker 4: Maybe we should deport certain people from the country. This

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Speaker 4: is all kind of nuts. Now. I do not think

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Speaker 4: anybody would rate the current German coalition highly. They did

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Speaker 4: very poorly in the election, but they're probably thinking, well,

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Speaker 4: why would we do a snap election because we get

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Speaker 4: wiped out, So that's a bit of logic coming there.

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Speaker 1: Part of the difference in tactics between Schultz and Macron

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Speaker 1: has to do with how each leader came to power.

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Speaker 4: I mean, Maccun's whole legacy was originated by a gamble

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Speaker 4: right to come out of the left and create a

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Speaker 4: new party and make France a three party system, which

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Speaker 4: just hadn't been for years. So I think definitely maybe

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Speaker 4: there's a difference in political culture, difference in political calculation.

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Speaker 4: But also I think simply that it is true that

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Speaker 4: Le penn is a much more immediate threat than the

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Speaker 4: IFD is in Germany, but maybe it's a question of time.

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Speaker 1: Marie Le Penn says she wouldn't call for Macron to

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Speaker 1: step down if her party wins the snap election and

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Speaker 1: the twenty eight year old Jordan Bardella becomes prime minister,

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Speaker 1: But as Lionelle says, it's still pretty hard to say

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Speaker 1: just what her party's policy priorities would be and how

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Speaker 1: the National Rally would govern. Another far right leader who's

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Speaker 1: floated as perhaps a model is Georgia Maloney, the current

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Speaker 1: Prime Minister of Italy. In those EU Parliament elections, her

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Speaker 1: party won almost thirty percent of the vote.

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Speaker 4: She's seen as someone who's focusing a lot on conservative

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Speaker 4: and Catholic values, whether you agree with it or not,

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Speaker 4: but she picks her battles. She does not go to

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Speaker 4: the financial market. She does not go to Brussels and

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Speaker 4: say I'm willing to revolt against all of your rules,

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Speaker 4: and if the market doesn't like it, they can sell

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Speaker 4: my bonds and turn against me. So the optimistic view

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Speaker 4: from some people, which I don't entirely share, is the

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Speaker 4: idea that Le Penn her empty vesselness is an because

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Speaker 4: quickly she will realize she cannot do any of these things,

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Speaker 4: and the idea is that basically she'll come into power

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Speaker 4: somehow markets will mold her, the deep state will mold her,

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Speaker 4: CEOs will mold her, and she'll become an acceptable face.

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Speaker 4: But we don't know.

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Speaker 1: But even if markets do offer some checks against policies,

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Speaker 1: let's not forget the disastrously short tenure of former UK

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Speaker 1: Prime Minister Liz Truss, there is still this sense that,

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Speaker 1: no matter what, what used to seem radical across Europe

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Speaker 1: has now become mainstream, that overall, the rise of the

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Speaker 1: far right has led many countries, from France to Germany

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Speaker 1: to Spain to adopt policies that once seemed confined to

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Speaker 1: the fringes.

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Speaker 4: Clearly, there is something in the current state of democracy

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Speaker 4: where there is a hunger for more authority, more executive power,

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Speaker 4: more better, faster, closer to those as less technocratic, more

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Speaker 4: identif debased, more hawkish against imtegration, and more economically let's say, protectionists.

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Speaker 1: I asked Leonelle, why all of this is coming to

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Speaker 1: a head now.

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Speaker 4: Well, we've gone through a pretty major crisis. We went

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Speaker 4: through COVID where we realize that actually, not only are

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Speaker 4: we vulnerable to this kind of pandemic, but also governments

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Speaker 4: are able to go to very great lengths to control

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Speaker 4: pandemics and then control the economy. It's huge. And then

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Speaker 4: with the war in Ukraine we had an inflation shock

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Speaker 4: and energy shock, which people find unbearable, even though you

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Speaker 4: could argue it's worth sacrifice and it was well managed.

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Speaker 4: Clearly people feel vulnerable, and I think that that has

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Speaker 4: changed everyone's outlook on the way the European model works.

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Speaker 1: And of course it's not just in Europe where we've

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Speaker 1: seen a shift to the right. What do you think

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Speaker 1: the lesson of all of this is for those of

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Speaker 1: us who are watching this unfold in the US are

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Speaker 1: in the middle of a campaign presidential election just a

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Speaker 1: few months away, how would you counsel us to interpret

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Speaker 1: what we're seeing in France, in Germany and maybe on

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Speaker 1: the continent were broadly.

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Speaker 4: Well, firstly, that there are global similarities. I think Trump

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Speaker 4: and Brexit were the kind of beginnings of what we're

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Speaker 4: seeing today. I do think the economy has something to play.

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Speaker 4: I think people have been quick to assume that it

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Speaker 4: can't be economically related because countries that are prosperous are

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Speaker 4: still having a kind of rebellious moment. But I would

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Speaker 4: say in Europe especially, we have gone down a road

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Speaker 4: of a certain type of fiscal policy, certain type of

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Speaker 4: monetary policy that is basically built around export competitiveness, keeping

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Speaker 4: wages down low, managing the cost the cost of labor

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Speaker 4: inside so you can export goods around the world. Today,

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Speaker 4: I think in Europe we're seeing that more or completely

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Speaker 4: has become bankrupt. Now. The hope, and this is where

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Speaker 4: the US should come in. The hope is that the

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Speaker 4: US can help europe right, can kind of guide it

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Speaker 4: down a more independent path, a path that is not

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Speaker 4: just a kind of giant protectorate that just is there

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Speaker 4: to trade with and that's it. So regarding transnatic relations,

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Speaker 4: I hope the US can be a positive influence. But

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Speaker 4: I do feel that in the European world, the economic

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Speaker 4: model has had a lot to answer for.

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Speaker 1: After those European elections, EU commissioned President Ersula vander Lyon

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Speaker 1: addressed the gains made by far right political parties across Europe.

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Speaker 6: The center is bolding, but it is also true that

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Speaker 6: the extremes on the left and on the right have

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Speaker 6: gained support, and this is why the result comes with

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Speaker 6: great responsibility for the parties.

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Speaker 4: In the center.

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Speaker 1: Is that wishful thinking? How much strain is it under?

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Speaker 4: I think for someone like vonder Lyon and I think

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Speaker 4: there is the let's say it is it is faith

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Speaker 4: and belief that the center right, the center right can

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Speaker 4: tame and control the extremes. So this, I think is

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Speaker 4: that is the kind of confidence, let's say, from someone

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Speaker 4: like vonder lyin and who knows it might hold that

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Speaker 4: We have a lot of examples that show that it

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Speaker 4: might not hold.

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Speaker 3: Rist cementno vivai public viv France.

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Speaker 1: That's it for The Big Take. I'm David Gerre. This

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Speaker 1: episode was produced by Adriana Tapia, Jessicaebec, and Thomas lou

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Speaker 1: It was edited by Aaron Edwards and Ben Sills. It

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Speaker 1: was fact checked by David Fox. It was mixed by

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Speaker 1: Blake Maples. Our senior producers are Kim Gilson and Naomi

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