Europe continues its rousing election year on Sunday with a first round of the French presidential contest that will decide if the center can hold or a blood-and-soil nationalist will square off against a throwback socialist. What could go wrong?
For months the smart money thought the first round would set up a final match pitting Marine Le Pen of the right-wing National Front against a reform-minded centrist. That could still happen if the other leading finisher is François Fillon, the nominee of the center-right Republicans who touts a free-market platform; or center-left, independent Emmanuel Macron, who doesn’t go as far as Mr. Fillon but still promises to reform labor and tax laws. Either would be favored against Ms. Le Pen in a runoff.
But suddenly the two reformers might be surpassed by far-left independent Jean-Luc Mélenchon, who is telling the French they can grow richer by working less and spend more by earning less. He’d cut the work week to 32 hours from 35, cut the retirement age to 60 from 66, prevent companies that have laid off workers from paying dividends, and ignore European Union limits on fiscal deficits. On foreign policy he is anti-American, anti-NATO and pro-Vladimir Putin, and he has written a book subtitled “The German Poison,” which should make for pleasant summits in Berlin.
Ms. Le Pen is hoping to vindicate her long-running effort to transform her father’s National Front into a respectable party. Her views on Europe, America, Russia and the state role in the French economy are distinguishable from Mr. Mélenchon’s only by nuances.
The National Front’s toxic history of anti-Semitism and its hostility to minorities and immigrants has traditionally put a ceiling on Ms. Le Pen’s vote, especially on the left. But that might not hold if Mr. Mélenchon doesn’t make it to the final round and his supporters must choose between Ms. Le Pen and one of the centrists.
Mr. Fillon’s agenda comes closest to what France needs to revive its stagnant economy, notwithstanding his affinity for Mr. Putin’s Russia. He promises to balance the budget within five years, cut €100 billion ($106.72 billion) in spending, slash the corporate-tax rate to 25% from nearly 35%, end the 35-hour work week and liberalize labor laws to encourage hiring. All of this is a hard sell in France at any time, but Mr. Fillon’s credibility has been compromised by news that he put family members on the public payroll.
Mr. Macron’s reforms don’t go as far as Mr. Fillon’s, but he’d also cut the corporate-tax rate to 25%, reform the work week and reduce labor-related taxes for entrepreneurs. But the 39-year-old has never held elected office and failed to sell this program to the National Assembly when current Socialist President François Hollande made him economy minister.
All four major candidates are polling at around 20%, but Mr. Mélenchon has momentum and the highest personal favorability. A Le Pen-Mélenchon finale would be a political shock to markets and perhaps to the future of the EU and eurozone. The best result would be for one or both centrists to make it through, but the fact that both could lose to the radicals is an indictment of the main political parties.
