Le Pen: France must leave the eurozone

  • [H]igher per capita GDP growth is significantly negatively linked to the support for extreme political positions. While estimates vary between specifications, we find that roughly a one percentage point decline in growth translates into a one percentage point higher vote share of right-wing or nationalist parties. –The OECD’s growth prospects and political extremism, VoxEU, May 2010
  • you have the makings of a depression shaped like a series of W’s consisting of short and uneven business cycles. The secular force is the D-process and the deleveraging, so I expect deflation to be the resulting secular trend more than inflation. Needless to say, this kind of volatility will induce a wave of populist sentiment, leading to an unpredictable and violent geopolitical climate and the likelihood of more muscular forms of government. – The recession is over but the depression has just begun, Credit Writedowns, Oct 2009
  • The global economy, now supported in the main only by the overextended U.S. consumer, finds itself at stall speed, susceptible to any number of potential exogenous shocks. Ultimately, the economic malaise created by this confluence of events will take years to unwind. A positive outcome to this process is dependent wholly on liquidation of excess credit and consumption. This process will be extremely painful in the short term, but will lead to a healthy economy long-term. Unfortunately, experience shows that these painful steps will only be taken as a last resort. Moreover, geopolitical events become volatile in a world of economic insecurity, leading to political upheaval and protectionism. – The US Economy 2008, Mar 2008

I think you have to put Marine Le Pen’s comments which are to follow in context. The three quotes from 2008, 2009, and 2010 tell you what is to come should not be unexpected.

The global economy has had an economic and financial convulsion the likes of which we have not witnessed in three quarters of a century. The expected response of defending the status quo ante in such deep downturns is always destined to run up against, recession, bailout or austerity fatigue because the length of the downturn is more than people can bear. And the result is protest and eventually violence.

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That’s where demagoguery comes into play. Demagogues love an explanation vacuum. Since time immemorial, where there has been public disenchantment with the status quo, there has always been some demagogue waiting in the wings with a ready-set explanation of what’s wrong and how they were going to fix it. These are people who are considered fringe elements in good times, but when economic hardship comes their ready-made explanations and confabulation become a toxic mix which propels them to prominence.

The politics of economics, November 2009

That’s the context here. And with the euro zone about to implode, it makes sense for politicians outside of the main stream to rise up, grab the metaphorical mic and make a play for a nationalist response. That’s what Marine Le Pen hopes to do, especially if the pressure on France builds in the face of German and ECB intransigence.

Belgian daily De Standaard writes:

France must leave the eurozone and institute strict border controls. This is what presidential candidate Marine Le Pen, president of the far-right National Front party, said Saturday. She would not comment about the details however.

Le Pen is participating in the presidential elections that will take place in France in 2012. Saturday in Paris, she made her vision for the future of the country known. She promised to uphold family values ​​and to fight against immigration. She also rejected globalisation.

She did not reveal too much on specific economic policy or France’s departure from the euro. However she said that in January she will present a "powerful plan".

Le Pen, who took over leadership of the National Front from her father, Jean-Marie, said she would make her party more attractive. The National Front is strongly opposed to Islam and immigration.

Source: Marine Le Pen wil Frankrijk uit eurozone – De Standaard

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2 Comments
  1. Jeangelinas says

    What are the odds for the Euro? I’ll bet against its’ survival by staying on the sidelines. Although even holding US and Can cash is a bet on an outcome. Risky to play one way or the other directly? Betting on political binary events is just to dangerous for my taste. What ‘safe and simple’ (no derivatives of something…) ways to protect assets from the folies of mad population and their political representatives?

    How risky is cash ‘short term’?

    JPG

  2. Jeangelinas says

    What are the odds for the Euro? I’ll bet against its’ survival by staying on the sidelines. Although even holding US and Can cash is a bet on an outcome. Risky to play one way or the other directly? Betting on political binary events is just to dangerous for my taste. What ‘safe and simple’ (no derivatives of something…) ways to protect assets from the folies of mad population and their political representatives?

    How risky is cash ‘short term’?

    JPG

  3. David Lazarus says

    While I agree that France will eventually exit the euro. It will be months before that happens, and it will be after the collapse of Italy. Even that is not definite yet. I would also question the fact that the right wing parties will benefit from further collapse. The UK at the last election voted out the ruling party but could not endorse a right wing Conservative party entirely, and we had to have a coalition government. It is incumbents who are the ones at risk. The British National Party, which is equivalent to the French National Front lost virtually all their local seats at the last election, which goes against the idea that right wing parties benefit hypothesis. 

    So Merkel and Sarkozy will be ousted at the first opportunity. I doubt that the French National Front party will do as well as they hope. There will be an increase in support but that will be a protest vote. It will be the election after that will be interesting. I doubt that the new ruling parties will do anything right and they will get ejected in due course. 
    The solution is as stated the liquidation of the credit bubble. In some respects that is happening even against government wishes. The banks are cutting loan books and selling assets especially in the EU periphery. That is probably the best news I have heard in the last few weeks over this crisis. It means that the banks are doing the right thing even if it is not for the right reasons, they are doing it to save themselves. 

    I do agree with you that we are facing a decade or more see sawing economies until the debts are eliminated. I do not see nationalism being the problem right away. It will be existing governments ignoring the electorate that will lead to violence. We live in uncertain times.

  4. Anonymous says

    While I agree that France will eventually exit the euro. It will be months before that happens, and it will be after the collapse of Italy. Even that is not definite yet. I would also question the fact that the right wing parties will benefit from further collapse. The UK at the last election voted out the ruling party but could not endorse a right wing Conservative party entirely, and we had to have a coalition government. It is incumbents who are the ones at risk. The British National Party, which is equivalent to the French National Front lost virtually all their local seats at the last election, which goes against the idea that right wing parties benefit hypothesis. 

    So Merkel and Sarkozy will be ousted at the first opportunity. I doubt that the French National Front party will do as well as they hope. There will be an increase in support but that will be a protest vote. It will be the election after that will be interesting. I doubt that the new ruling parties will do anything right and they will get ejected in due course. 
    The solution is as stated the liquidation of the credit bubble. In some respects that is happening even against government wishes. The banks are cutting loan books and selling assets especially in the EU periphery. That is probably the best news I have heard in the last few weeks over this crisis. It means that the banks are doing the right thing even if it is not for the right reasons, they are doing it to save themselves. 

    I do agree with you that we are facing a decade or more see sawing economies until the debts are eliminated. I do not see nationalism being the problem right away. It will be existing governments ignoring the electorate that will lead to violence. We live in uncertain times.

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