French Troubles

From the FT, an overview of the French economy after Hollande:

"The reforms have so far failed to break France’s two-tier labour market. Last year, 86.4 per cent of total hiring was into temporary jobs — and of those, 80 per cent were for contracts shorter than one month. Meanwhile, long-term unemployment remains stubbornly high: more than 45 per cent of the unemployed in France have been without a job for more than a year, the highest proportion since records began in 2003. 

Among the most vulnerable are young people, immigrants and the low-skilled. France’s youth unemployment rate is roughly double that of the UK and continues to rise — in contrast with a decline in most advanced economies. The story is similar for foreigners and those with lower levels of education."

This two-tier labor market that excludes young people (and immigrants) is probably a key to understanding Le Pen's surprising popularity among the young. Recall that in the US and Britain, the populist xenophobes are more appealing to the old.

The evolution towards a single centrist party headed by Macron, with opposition coming predominantly from the left and right extremes, seems dangerous. A grand coalition can work temporarily, but it increases the voice of the extremist parties, and makes it more likely that they’ll reach power.