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Presidential candidate Marine Le Pen during an election campaign in Perpignan, southern France: The danger of right-wing populism has not been averted
Photo: Lionel Bonaventure / AFP
Inflation is eating away at democracy.
Germany experienced it in extreme form almost a century ago: the hyperinflation of the early 1920s polarized society and fueled the rise of the enemies of democracy.
Great Britain suffered a winter of anger when, at the end of the 1970s, the era of rising prices and economic stagnation would not end and rabid protests shook the former heart of the Empire.
Collapsing purchasing power and weak economic development form a toxic mixture - especially when they meet a social mood that already treats state institutions with deep mistrust and cynicism.
The currently high and rising inflation rates are therefore politically dangerous.
They are not a purely economic problem, but a social one.
Enormous earthquakes can be expected, the previous order can slip.
The Brexit referendum and the election of Donald Trump as US President may have been some time ago.
But the right-wing populist danger is by no means over.
In the USA, the Trumpists are on the up again, also because of the ongoing surge in inflation;
the ultra-right mainstream of US Republicans can hope for gains in the autumn congressional elections.
According to polls, more than half of voters in the first round of the presidential election on Sunday in France will vote for far-right or far-left candidates.
That was also the case five years ago.
But now Marine Le Pen, leader of the right-wing nationalist »Rassemblement National«, could actually be elected president in the second ballot in two weeks.
Just a few weeks ago, an election victory for incumbent Emmanuel Macron seemed almost certain.
In the meantime, however, he and Le Pen have come so close in the polls that a little more or less turnout can make the difference between victory and defeat.
How could that happen?
Rien ne va plus
–
Le Pen and the EU
Le Pen's poll numbers began to rise when certainty spread that the measured price increase is not an economic long-Covid phenomenon, but has developed a critical momentum of its own - and Le Pen resolutely focused her campaign on the exploding cost of living.
A catastrophic scenario is thus approaching: in the middle of the escalation of the conflict with Russia, a Putin friend would move to the top of the second largest EU country.
From a German perspective, France is by far the most important partner country in almost every respect.
When, if not now, is the time to strengthen the EU and finally adopt Macron's formula of "European sovereignty".
The EU needs common defense and deterrence, a permanently stabilized monetary union and at least a minimum of social balance in order to strengthen itself internally and externally - what else?
However, with a nationalist at the head of state, a stronger Europe would be a long way off.
The EU, the euro, NATO – Le Pen is, to put it mildly, aloof about all of this.
Her once shrill France-first rhetoric has softened her in order to sell herself to the middle-class as a viable alternative.
A »Frexit« is no longer on the agenda.
But the horror of a possible Le Pen presidency has rocked the stock markets in the past week.
No wonder: the "Rien-ne-va-plus" scenario of a paralyzed EU is no longer an absurd specter, but a very real danger.
Vladimir Putin, Xi Jinping and Donald Trump will rub hands if it comes to that.
Europe would have taken itself out of the geostrategic game for the foreseeable future - with hardly foreseeable consequences.
Bonjour Tristesse - the French mood
The rising cost of living is hitting a nation in a state of deep sadness, as a look at the latest Eurobarometer survey shows:
The situation in the country as a whole?
Bad, say two-thirds of those surveyed, good, only a third responded.
(For comparison: in Germany the situation is reversed.)
The economic situation?
Bad, say 67 percent.
Is the country developing in the right direction?
No, say 65 percent.
Do you trust political parties?
No, say 87 percent.
The government?
No, say 69 percent.
The parliament?
No, say 65 percent.
The country's biggest problem?
Inflation, say most respondents;
Far behind are earlier exciting topics such as immigration, terrorism and crime.
The numbers are from January and February of this year.
The Ukraine war and the consequences are not yet reflected in it.
The fact that the reputation of the European Central Bank (ECB) has also been damaged fits in with the mood: only 29 percent of the French respondents said they trusted the Frankfurt monetary authority - one of the lowest values in the EU.
Even in eurosceptic non-euro countries like the Czech Republic and Poland, the ECB enjoys a higher reputation.
The central bank is run by a French woman, Christine Lagarde.
But perhaps therein lies the problem for a nation that sees its elite as arrogant, withdrawn and, when in doubt, corrupt.
Macron, the young, energetic and fundamentally optimistic president, has been able to do little to change this mood over the past five years.
Even if he objectively initiated a lot of big projects and even implemented some of them, including a labor market reform and a project to improve equal opportunities in the education system - he seems too clever, too smart, too well dressed, too perfectly staged for the taste of many French people, who live away from the few metropolises in this large country.
Les Misérables – Inflation fuels mistrust of the state
On the occasion of the last election five years ago, we also discussed the mood on the left bank of the Rhine at this point.
"Frustration in France" was the title of the text.
The data available at the time formed the desolate self-image of a society that seemed to have lost confidence: in its political leadership, in its state institutions, in its own capabilities.
The French – according to their collective self-assessment, they were les misérables.
Little has changed in this finding.
Now, however, there is inflation.
Worse still, the lengthy appeasement on the part of the central bankers and many economists is likely to have increased mistrust in the political class and its technocratic assistants.
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For many months, the central banks announced, with Lagarde leading the way, that the price increases were “temporary”, triggered by short-term supply bottlenecks due to lockdown-related production restrictions and by a statistical effect resulting from the fact that the price development in 2021 was compared to the low prices during the corona crisis the year before was oversubscribed.
But elevated inflation rates have proven persistent.
Instead of leveling off towards the end of 2021, they have continued to rise.
It is this wave that the populists are riding, including Le Pen.
The fact that inflation has now come as a surprise makes it particularly uncomfortable.
Purchase and investment plans can easily turn out to be wrong in the event of unforeseen price increases.
Workers who have underestimated the rise in the cost of living see the purchasing power of their wages dwindling.
Inflation sucks.
Surprisingly severe inflation is particularly big crap.
(We talked about this in January.)
Inflation undermines trust in the state, which acts as the monopoly provider of legal tender in our monetary system.
The vast majority of citizens are at the mercy of price increases.
Only a minority can benefit from this - by reducing their liabilities in real terms and possibly even benefiting from price increases with the right investment deals.
The Governing Council of the ECB meets on Thursday under the chairmanship of Lagarde, a central bank at war, torn between fighting inflation and financial stability.
There will be a lot to talk about.
The most important dates of the coming week
Expand areaMonday
Beijing –
Inflation in China
– Beijing's statistical office announces figures on price developments.
ExpandareaTuesday
Wiesbaden/Washington -
Inflation in the West
-
The statistical offices of the USA and the Federal Republic of Germany present figures on price increases in March.
ExpandareaWednesday
Beijing -
De-Globalization
- China's customs report on China's foreign trade in the first quarter.
The lockdowns are likely to leave some marks.
Group Results
I
– Blackrock, JP Morgan Chase, Delta Airlines, Tesco financials.
Expand areaThursday
Frankfurt –
hesitation on the interest rate screw
– ECB council meeting: The central bank must explain how it intends to get inflation under control.
Group Results
II
- Results from Wells Fargo, US Bancorp, Goldman Sachs, Morgan Stanley, State Street, Citigroup.
ExpandareaFriday
– Good Friday –