France has voted. And I wrote a piece for Social Europe, in which I try to put the outcome of the election in the European context. If you do not want to read all of it, here are the bullet points:

1. France is considered the sick man of Europe for the standard reasons (rigidity lack of reform etc)
2. 2) But in fact “hard” data are not that bad, rather the contrary (productivity investment FDI, etc). Just look at Thomas Piketty’s blog post from a few months ago.
3. lost competitiveness is price competitiveness, that is not France’s fault, but Germany’s (wage deflation).
4. In fact the sick man of Europe is Europe itself, because it forces countries into a dilemma:
   • They can engage in fiscal competition and internal devaluation. But let’s not fool ourselves, there is no way that this can be done without killing the European social model. Only the downsizing of the welfare state can allow reducing taxes and labour costs and keeping public finances sustainable;
   • Or, they (try to) protect their social model, but pay the price of low competitiveness and slow growth.
5. France oscillated between Scylla and Charybdis, leaning more towards the second path.  And it suffers, because most other countries did take the internal devaluation  path, willingly or not . Everything in the way the EMU is constructed, pushes countries to engage in deflationary policies.
6. Exiting (from the Euro, from the ECU, from the EU) would in no way subtract countries to the dilemma. A small open economy would have an even harder time carrying on autonomous economic policies (more in general, what I think of XXexit is well summarized here. To be fair to my colleagues, I contributed very little to that piece, but was happy to sign it).
7. Thus, the survival of the French model is in Europe, or it is nowhere. The next President’s fate will have to be decided there
8. If France wants to save its social model, it needs to trigger change in the EU. It will save its model. Otherwise it is doomed; it will not survive, socially and electorally, to five more years of muddling through.
9. And viceversa, if there is a chance for Europe to change, that chance is represented by a coalition against deflationary policies that only France would have the strength to form and lead. There is one way, and only one way, to escape Scylla and Charybdis.

I did not write that in the Social Europe piece, but I want to add that the path is very narrow. Macron has the virtue of putting Europe at the center of his project, but his reform proposals are for the moment very vague. And more importantly, his tax reduction plan resembles a bit too much to the good ol’  supply side measures that sank Jean-Baptiste Hollande.  But then, what do we know? First, policies are shaped by events; and second Le Pen would of course mean the end of the Euro right now. So, we can just hope that (and fight for) France and Europe will walk that narrow path.