Elections in U.K. and France Reveal Diverging EU Paths

Two elections in two countries within the space of three days, and history appears to be reasserting itself. The U.K. is turning away from the European Union and France turning toward it.

Britain's suspicion of Continental entanglements dates back centuries. After World War II, its leaders shunned the Franco-German project that became the EU, certain it would fail. It finally joined in 1973, attracted by its economic success that contrasted with own decline. Now, once again, it is now turning its back.

In almost every U.K. election outcome predicted by opinion polls, Britain moves further away from the EU. Even as anxiety rises in some business sectors -- not least about their ability to hire overseas workers post-Brexit -- and as higher inflation begins to erode living standards because of the drop in the pound following last year's referendum, the U.K. seems to be headed ineluctably out of the EU.

France seems to be going in the other direction. President Emmanuel Macron campaigned on an unmistakably pro-EU ticket and has driven all before him. Opinion polls suggest that his new party's candidates will sweep the board in elections for the National Assembly, the first round of which is on Sunday. That will give him the mandate to push through long-awaited changes to the French economy that he hopes will cut unemployment and spur growth.

"The elites in Britain and France have always had very different views on the merits of EU membership," says Charles Grant, director of the pro-EU Centre for European Reform.

There are other differences across the English Channel. Mr. Macron has marginalized the traditional center-right and center-left parties of French politics, creating a powerful new force in the middle. The Gaullists and Socialists will be left as shadows on the fringes of the National Assembly, opinion polls predict.

In the U.K., meanwhile, a political realignment seems as far away as ever and the traditional two-party system appears to have reasserted itself. Most constituency battles in England were two-way fights between the Conservative and Labour parties, though Labour's path to government is held back by the Scottish National Party's domination of Scotland, once a happy hunting ground for Labour.

That difference is as much a consequence of the two countries' different political traditions as of any fundamental difference in political attitudes. Political realignments are more common in France's mixed presidential and parliamentary system. Britain's winner-take-all parliamentary system has made political transformations a once-in-a-century phenomenon.

In both countries, voters appear to have been unsettled by globalization. Though Mr. Macron has promised economic reform, he has also supported Buy Europe policies, increasing trade defenses and boosting controls over foreign investments in important industrial sectors.

In the U.K., both Conservatives and Labour responded by moving to the left and pledging control over immigration. Labour promised a return to free school meals and free college tuition, as well as the nationalization of railways and utilities.

For their part, the Conservative manifesto deviated dramatically from Margaret Thatcher's free-market legacy. It declared "We do not believe in untrammelled free markets." It added "We must reject the ideological templates provided by the socialist left and the libertarian right and instead embrace the mainstream view that recognises the good that government can do."

"We haven't had such an illiberal pair of political leaders" in many decades, says Mr. Grant.

Britain and France are thus diverging. A reform-minded French president has doubled down on the EU while the British have turned their backs on the bloc and seem less convinced of the power of markets.

Both economies start out on these different paths at a similar size. Their different future trajectories will have a demonstration effect that could have important consequences for the future of Europe.

If the British economy performs successfully, confounding the expectation of most economists who think Brexit makes success less likely, then leaving the EU may look less perilous to others. If the French economy outperforms while it is embedded inside the bloc, the economic arguments for other countries to leave will be weakened.

(END) Dow Jones Newswires

June 08, 2017 13:45 ET (17:45 GMT)