The Global Political Pendulum at Work

Merkel, Macron and Trudeau

Since the Summer of 2016, the world has gravitated towards uncharted and very ominous waters, like Brexit and Trump’s presidency. For the time being, the UK and the US, two traditional bastions of sobriety, stability and reliability, have moved towards extremes, and illogicalness. A true great loss for the world as a whole.

Hopefully, there are growing reasons for cautious optimism in the global arena.

Emmanuel Macron has grown exponentially in his first weeks in office, confronting and very cleverly contrasting France’s (and the free world’s) liberal and environmental values against Trump’s and the radicals’ in both extremes, right and left. Furthermore, the whopping majority in the French assembly won by Macron’s political party, La Republique en Marche in early June’s legislative elections completed the major shakeout, and is very well on its way to dismantle and remake the French political establishment.

Édouard Philippe, France’s prime minister, referring to the overwhelming legislative victory, declared: “… By their vote, the French, in their great majority, preferred hope to anger, confidence to withdrawal”.

With such legislative victory, the biggest electoral mandate in years, Macron should face little opposition to implement badly needed swift reforms in the labor, tax and regulatory areas, among others, indispensable to reinvigorate France’s faltering economy. On June 15, Macron declared: “I want France to be a start-up nation. A nation that thinks and moves like a start-up”.

Never before has the world witnessed such a successful advance in the political arena in a developed nation, in such a short time both, on a personal level for a politician, and for a new political party (that’s not even two years old). Indeed, this  is a very strong and very welcome breath of fresh air, not only for France or the EU, but for the world as a whole.

The French president is in a position of strength that leaders of most other democracies would die for. Macron knows it, and seems to be willing and able to use it, for constructive purposes.

Given France’s victory, there are a couple of very encouraging elements that deserve to be carefully analyzed:

  • Citizens all over the world are sick and tired of the political system’s ineffectiveness to address and cope with the major issues.
  • In the 18th century, France (along with Great Britain) was, in many respects, the cradle of the Enlightenment and rebirth of the highest ideals of democracy and economic liberalism. This makes Macron’s victory even more significant since France is reclaiming an unexpected leadership role for the world in this regard.

As far as the US is concerned, let’s hope that hard earned lessons result from contrasting France’s recent electoral results with it’s own. In just a few months, since the Trump presidency began, the US executive office has stopped leading the free world and Western society, and has quickly transformed itself into a rogue office, with a vision to transform the US into a nationalistic and closed society. A cautionary tale that not even the largest economy on Earth, and one of the most advanced societies, is exempt from. The increasing divorce on positions between the US’ business sector and Trump is very evident. Harmony is a very alien concept for Trump. In most respects, Trump is the very antithesis of good, effective, leadership.

The election of Emmanuel Macron, combined with Germany’s strength with Angela Merkel at the helm, and Great Britain’s growing weakness with Brexit coupled with a very weak political leadership under Theresa May, has revived the possibility of the German-Franco engine at the hearth of Europe. This trend has instilled  a renewed sense of confidence not only in France, but in the EU, and even in the world at large.

The EU, and its monetary system  are an unfinished structure. Both require a profound evolution, to become more integrated and functional entities. Current conditions, with the appropriate leadership (Macron and Merkel), seem to be ripe for it.

Macron and his party, La Republique en Marche, have made a great contribution to France, to the EU, and to the world, when most required. The Trump presidency has been a great loss for the US and for the world at large. Fortunately, young, energetic leaders like Macron and Trudeau have come to the rescue. Angela Merkel and Germany are also a stalwart of democracy and liberal values, like open societies and free markets. These three leaders have all the elements to form a virtuous troika, much like the one formed in the 1980s by President Ronald Reagan, Prime Minister Margaret Thatcher and Pope John Paul II.

Macron is projecting himself like a politician of global stature. He seems to have what it takes to be a very powerful, constructive influence in the EU, and in all interactions in any forum. In turn, a reinvigorated EU (in conjunction with many other key allies, like Canada, and even China) can fill the huge vacuum created by the US’ withdrawal of so many important roles in global matters.

Naturally, as is always the case, this is a work in progress and, as such, significant risks still have to be confronted and prevented from materializing.

The progress of mankind has never been in a straight line. Hence, a pendulum that truly moves around, can still be our best chance of true global harmonic progress.

Angela Merkel has behaved with firmness and great class against Donald Trump. Justin Trudeau, respectfully and elegantly (two attributes Trumps is miles away from) has positioned Canada’s liberal values, the traditional and permanent US standing for over a century, prior to Trump. Trump has an outdated feudal mentality, where he see subjects around him, not collaborators, or citizens.

Both young leaders have behaved very appropriately, with a dignified representation of their respective countries.

The vacuum created by political volatility and uncertainty both in the US, as well as in the UK have opened up an incredible opportunity for young, energetic leaders like Emmanuel Macron in France and, to a different degree, Justin Trudeau in Canada, to exercise greater influence, politically, socially and economically in the world.

Most fortunately, through the ebb and flow, reality has a way to eventually correct the excesses and/or big mistakes of society. Naturally, this is an interactive mechanism and in the midst of it, a true learning process. Fortunately, the principle of unintended consequences has a way of pushing, most of the time with great resistance, mankind towards reasonable decisions, correcting excesses, and learning from it. Let’s hope the world is now in the midst of such a phenomena.

The world needs stable leaders in unstable times. A pair (or more) of firm, sensible hands, are always welcome.

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About Martin Marmolejo

Global Investment Manager | Founder & Managing Director at MMA Global Investment Management | Proud husband and father | Follow me @globalmarmolejo.

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