Brexit and the unthinkable – ‘Frexit’ next?

The UK’s Brexit vote and Trump’s election triumph took many pundits by surprise. As Europe faces several national elections, more surprises can no longer be discounted, especially on a possible French exit or Frexit, as political unpredictability is now the name of the game.

The French financial markets have been rattled by a late surge in the second round poll numbers of National Front leader Marine Le Pen in a hypothetical runoff against the front-runner, centrist independent Emmanuel Macron in May.

That sell-off was further exacerbated by rumours of a possible alliance between Socialist candidate Benoit Hamon and the far-left’s Jean-Luc Melenchon, which, if it were to propel the left to the second round, could further increase chances of a Le Pen victory. François Fillon, the centre-right’s standard-bearer in France’s forthcoming presidential election chances was seemingly fast slipping.

Accused of defrauding the public purse by employing his wife, Penelope, and their children in “fake” parliamentary jobs, Fillon will be formally charged by prosecutors on 15 March with leading politicians on the right, including former premier Alain Juppé, at first distancing themselves from his faltering candidacy, but in a last minute emergency meeting the party affirmed its support for Mr. Fillon as its main candidate. However, all is seemingly not lost to pro EU fans, with all eyes now on the first round of voting on 23rd April.

Should we now think outside the box and look forward to a future of either a looser European federation or full exit of more countries like France or Italy, with others seeking best possible bi-lateral trade agreements?

Dr. Mohamed Ramady

The referendum

Contrary to current assumptions, for instance, if Le Pen should win, she will not still be able to move quickly on a referendum to take France out of the Euro and the European Union, immediately. National Front officials explain Le Pen would first go through at least six months of negotiations with the European Commission before even going to a French referendum.

The French referendum in any case would not be a simple “in or out” vote as the British vote was last July, but for a more politically complicated drafting of a new French constitution rewriting the articles that regulate France’s EU membership, and introducing a proportional system to French electoral law. It would in effect be tantamount to creating a Sixth French Republic, and that could take years with stops or reversals along the way.

The result though would be to cast long and dark shadows over the European integration dream. Le Pen, if elected, would first to head to Brussels to convince EU partners to give France a new arrangement that would allow her to control borders, devalue the currency, and increase deficit spending. But that would be tantamount to exiting the single market, and France’s exit would factually mean the end of the EU as we know it.

The French centre-left/far-left alliance, while it cannot be completely ruled out, is highly unlikely. Hamon, despite playing coy in public, is pushing hard for a deal, but Melenchon will agree to one only on condition that he will be the presidential candidate in the coalition - a condition Hamon, who leads him in the polls, would never accept.

Le Pen’s candidacy could, however, get an assist from another, little noticed source, namely from centrist François Bayrou, should he declare a presidential run. To add to the current confusing French political leadership landscape, not even Bayrou himself appears sure yet whether to announce or not. While early on in the race he was leaning against a run, he could now be tempted, with Les Republicains candidate Francois Fillon plagued by scandal but still in the race, and centrist independent Emmanuel Macron losing some steam in the polls.

And even an announcement that Bayrou is not running himself but backing Macron could be a negative for the independent former economic minister, who would then have a harder time in claiming his distance from traditional party politics. Indeed, such is the state of French political party machinations and switching alliances that is the same reason that Macron has been begging former socialist presidential candidate Segolene Royal, who is eager to endorse him, not to do so, not wanting to remind voters of his ties to the embattled outgoing President, Francois Hollande.

Captains of the industry

French captains of industry are making their voices heard, unlike in the UK where polls seemed to indicate that a remain vote would scupper the Brexiteers and British industry leaders went along with accepted political wisdom. The global French energy giant Total’s CEO Mr Pouyanne warned against mounting economic protectionism, especially in developed countries, saying it may lead to disaster.

According to Mr. Pouyanne free trade has helped reduce poverty in emerging markets, and added that “This trend to have countries around the world thinking that it’s better to be inside their borders” than open to the world will lead to catastrophe,” and that Total is in favour of “open trade and fair trade.”

His remarks come as the French presidential candidate for the National Front party, Marine Le Pen, is calling for France to increase trade barriers, abandon the common European currency and exit the European Union and, despite a scandal concerning the misuse of EU funds by her assistants, is rising in opinion polls ahead of elections in April and May.

For multinationals like Total’s CEO, the euro “is a powerful currency” which needs to be kept, and added that voters’ support for Le Pen and the UK’s decision to leave the European Union are “a question mark for ourselves, the global leaders.”

However, populist and nationalist electioneering seems to be the order of the day even if populist candidates seem to be tarnished by scandals, and seemingly spurred on by Trump’s election in representing the forgotten masses. This raises the question on whether holding internationalist trade and political principles, however noble, too little too late for Frexit to happen?

Should we now think outside the box and look forward to a future of either a looser European federation or full exit of more countries like France or Italy, with others seeking best possible bi-lateral trade agreements?

For the Gulf countries this also raises some interesting questions for the future of the GCC bloc. Moving forward, should it be more fully integrated at the same pace for all countries, or should individual GCC countries forge closer economic, political and military links with like-minded countries, as the recent high level Saudi – Emirati coordination council retreat seems to indicate, but still remain within the bloc?
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Dr. Mohamed Ramady is an energy economist and geo-political expert on the GCC and former Professor at King Fahd University of Petroleum and Minerals, Dhahran, Saudi Arabia.

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Last Update: Wednesday, 20 May 2020 KSA 09:53 - GMT 06:53
Disclaimer: Views expressed by writers in this section are their own and do not reflect Al Arabiya English's point-of-view.
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