The Economist - UK (2022-04-02)

30 Europe TheEconomistApril2nd 2022

These suggest that German gdpwould take

a hit of up to 3% if imports of Russian ener­

gy were to cease immediately. That is sub­

stantially less than the 4.5% decline of Ger­

man  gdpin  2020,  the  first  year  of  the  co­

vid­19 pandemic, which Germany stoically

managed to weather.

“The  big  problem  is  gas,”  says  Moritz

Schularick, one of the authors of the paper.

The  loss  of  Russian  oil  and  coal  could  be

managed  relatively  easily,  since  they  can

be  replaced  by  imports  from  other  coun­

tries. But Germany gets roughly half its gas

from  Russia.  An  increase  in  gas  imports

from  other  countries,  the  substitution  of

electricity  from  coal  or  nuclear  power  for

the  gas­fired  sort  and  a  steady  refilling  of

storage  facilities  over  the  summer  could

only make up for70% of that, he reckons.

The central question is how German in­

dustry  would  cope.  Everyone  agrees  that

finding quick substitutes for gas in indus­

trial processes is a daunting task. Yet Ben­

jamin Moll, one of the other authors of the

paper, notes that during the second world

war the American economy showed an as­

tonishing ability to adapt to similar short­

ages.  When  in  1940  America’s  president,

Franklin Roosevelt, demanded that Ameri­

can firms produce 50,000 fighter planes a

year,  economists  deemed  his  request  in­

sane,  because  yearly  aircraft  production

for  the  military  in  1939  was  fewer  than

3,000.  By  the  end  of  the  war  America  was

producing 300,000 fighters annually.

In an interview with Welt am Sonntag,a

weekly  newspaper,  Wolfgang  Schäuble,  a

former  finance  minister,  argues  that  peo­

ple  sometimes  have  to  make  substantial

sacrifices  for  their  way  of  life  and  their

freedoms. Moreover, prolonging the war in

Ukraine is also costly for European econo­

mies.  “There  are  lots  of  hidden  costs  be­

cause of the uncertainty,” says Luis Garica­

no, a Spanish member of the European Par­

liament, who backs an immediate eu ener­

gy embargo. Mr Garicano fears that such an

embargo will only happenafterRussia fur­

ther  escalates  its  brutalwar.“We  should

not wait for that,” he says.n

In Russia’s pocket

Germany, energy consumption, 2020

By fuel type, % of total

Source:Eurostat

100

75

50

25

0

Others Renewables

and biofuels

Nuclear

Coal

Gas

Oil

Supplied

by Russia

France’spresidentialrace

A bitmoreof

a competition

“I

wantittobelesslikea rally,”declares

EmmanuelMacroninanelectoralclip,

ashestrollsaroundtheemptyindoorare­

nawestofParisinanovercoatandscarf,

scoutingoutthevenue:“Iwantsomething

morelikea sportingevent.”OnApril2nd,a

mereeightdaysbeforethefirstroundof

votinginFrance’stwo­roundpresidential

election,thesittingpresidentwillfinally

holdhisfirstelectionrally.Hemightneed

totakehisglovesoffatlast. Heisstillthe

firmfavourite.Buttheraceistighteningin

the finalstretch. Anda narrow second­

roundvictorycouldspelltroublefora sec­

ond­termpresidentlateron.

The averagegapbetween MrMacron

andhisnearestrival,thenationalist­popu­

listMarineLePen,hasnarrowedfrom 13

pointsonMarch15thtosevenpointstwo

weekslater,accordingtoTheEconomist’s

pollofpolls.OnMarch29thourforecast­

ingmodelstill gaveMrMacronan89%

chanceofre­election,andonlya one­in­

tenchancetoMsLePen.Buttwonewpolls

suggestthat,ifthepairmeetintherun­off

astheydidin2017, hisvictoryoverher

couldbeasnarrowas53%to47%.

AsRussia’swaragainstUkrainedrags

on,thepollbumpthatMrMacronenjoyed

frombeingatthecentreofdiplomaticef­

fortstoendithasbeguntowearoff.The

Frenchstillseemtocredittheirpresident

fortrying,despitehislackofsuccess.But

theyarenowworriedabouttheeffectsof

thewarontheirwallets.Moreover,theini­

tialdamage sufferedby threerival con­

tenders—MsLePen,thefar­rightEricZem­

mour and the far­left Jean­Luc Mélen­

chon—owingto theirpastsympathyfor

VladimirPutinseemstohavehada lasting

impactonlyonMrZemmour.IndeedMr

Mélenchon, a wise­cracking anti­nato

firebrandwhoisagainstarmingUkraine,

hascreptupinthepolls.Withfullysixcan­

didatesontheleft,includinga Communist

andtwoTrotskyists,thesprightly70­year­

oldisthetacticalchoiceforleftistvoters.

Furthermore,MrMacronisnowsaying

thingsthattheFrenchdonotmuchcareto

hear.Duringthepandemic,hefocusedon

spending “whatever it costs” to protect

peopleandjobs.OnMarch17thhelaidout

hisplans fora secondterm.Unlikehis

manifesto brochure in 2017, which was

filledwithsmilingfacesandexclamation

marks,thisyear’sdisplayssombreimages

andreferstothe“brutalreturnofthetragic

inhistory”.MrMacronpromises,among

otherthings,toraisethepensionagefrom

62 yearsto65;toobligebeneficiariesofba­

sicbenefitstoenrolintrainingorwork;

andtopayteachersmoreonlyiftheytake

on more tasks. Mr Mélenchon offers a

moreappealingalternative:“Retirementat

65 withMacron, 60 withme.”

Charges thatMrMacronrepresentsa

cosybusinesselitehavealsoresurfaced,

aftera reportfoundthegovernmentspent

€894m($1bn)onprivateconsultingfirms

in2021.Thisisinlinewithothercountries,

butseenasanaffrontinstatistFrance.

MsLePen,meanwhile,hascampaigned

deftly.OnMarch29thourmodelgaveher

an84%chanceofmakingittotherun­off.

Shehastakenherpromisestocuttaxeson

motorfuelandeasethecostoflivingtola

Franceprofonde, leavingrantingaboutim­

migrationtoMrZemmour.Ata timewhen

old fears about migrants and Islamism

have given way to supportfor refugees

fleeingUkraine,hisdiatribeshavejarred.

AtanoutdoorrallyinParisonMarch27th,

beforeacrowdwavingFrench flags,his

supporterschanted“Thisisourhome!”,an

oldfar­rightmantra.Atonepoint,duringa

passageonthevictimsofterrorism,they

brokeinto:“Macron,murderer.”

Inshort,despitehaving 12 candidatesto

pickfrom,votersonApril24thmay,aslast

time,seea run­offbetweenMrMacronand

MsLePen.Somearealreadysayingthat,

shouldhedefeatheragain,itwouldbea

victory“bydefault”.MrMacroncanhardly

beblamedforthemediocrityofhisoppo­

nents, nor the poor campaigns of the

mainstreamleftandright.Yetmuttering

aboutillegitimacyhasalreadybegun.n

P ARIS

EmmanuelMacronremainsthe

favourite,butthepollshavetightened

Still nothing much to worry about

France, voting intention in first round of

presidential election, main candidates, %

Sources:AlexandreLéchenet,NSPPolls;

TheEconomist’s Frenchelectionmodel

Chanceofwinningpresidency,atMarch30th0

30

25

20

15

10

5

0

Ze

Hidalgo

Jadot

Mélencho

Pécresse

Le Pen

LePen

Macron

0 25 50 75 100

2021 2022

Sep Oct Nov Dec Jan Feb Mar

Macron

Zem r

M

ggo

tt

nn

P se mmuurrr

MM

e ZZ m r

n

For interactive analysis of pre-election

France, and the challenges the country's

next president will face, go to econo-

mist.com /FracturedFrance