Should-Read: Dani Rodrik: Can Macron Pull it Off?

Should-Read: Dani Rodrik: Can Macron Pull it Off?: “Le Pen received more than a third of the second-round vote… And turnout was apparently sharply… indicating a large number of disaffected voters… https://www.project-syndicate.org/commentary/macron-germany-eurozone-fiscal-union-by-dani-rodrik-2017-05

…Macron was helped in this age of anti-establishment politics by the fact that he stood outside traditional political parties. As president, however, that same fact is a singular disadvantage…. Macron’s economic ideas resist easy characterization…. Many of Macron’s economic plans do indeed have a neoliberal flavor…. lower the corporate tax rate from 33.5% to 25%, cut 120,000 civil service jobs, keep the government deficit below the EU limit of 3% of GDP, and increase labor-market flexibility (a euphemism for making it easier for firms to fire workers). But he has promised to maintain pension benefits, and his preferred social model appears to be Nordic-style flexicurity–a combination of high levels of economic security with market-based incentives.

None of these steps will do much… creating jobs…. Since the eurozone crisis, French unemployment has remained high, at 10%–and close to 25% for people under 25 years old…. Macron… has proposed a five-year, €50 billion ($54.4 billion) stimulus plan, which would include investments in infrastructure and green technologies, along with expanded training for the unemployed. But, given that this is barely more than 2% of France’s annual GDP, the stimulus plan on its own may not do too much to lift overall employment. Macron’s more ambitious idea is to take a big leap toward a eurozone fiscal union, with a common treasury and a single finance minister….

Macron’s unabashedly Europeanist policies are not just a matter of politics or principle. They are also critical to the success of his economic program. Without either greater fiscal flexibility or transfers from the rest of the eurozone, France is unlikely to get out of its employment funk soon. The success of Macron’s presidency thus depends to a large extent on European cooperation. And that brings us to Germany….

Having portrayed the eurozone crisis not as a problem of interdependence, but as a morality tale–thrifty, hard-working Germans pitted against profligate, duplicitous debtors–German politicians will not have an easy time bringing their voters along on any common fiscal project. Anticipating the German reaction, Macron has countered it: “You cannot say I am for a strong Europe and globalization, but over my dead body for a transfer union.” That, he believes, is a recipe for disintegration and reactionary politics: “Without transfers, you will not allow the periphery to converge and will create political divergence towards extremists.”… Macron is almost certainly right…