Markets have found some comfort from Emmanuel Macron’s strong showing in the first round of the French presidential election as his success represents a buffer against the forces of populism and protectionism.
However, it is an indicator of the sorry state of European politics that the hard-right being forced into a mere second place represents a triumph.
Marine Le Pen has defeated the mainstream parties of the right and left and will now go head to head with Macron. That she should get this far will serve as a reminder to EU leaders, as if they need it, that all is not well in the countries of Europe.
Taking Le Pen’s share of the first round vote with that of far-left Melenchon and it’s clear that nearly 40 per cent of French voters want to fundamentally change the country’s relationship with the EU.
The French vote provides just the latest indication of an ongoing and global challenge to the established economic order – and it’s a change being reflected at the highest levels of international policy-making. Last month the G20 dropped an historic commitment to resist the forces of protectionism.
At the time, Germany’s Wolfgang Schauble conceded that the world’s largest economies were “unable to force partners to go along with wording with which they don’t agree”.
Now the IMF has followed suit – ditching its own pledge to oppose protectionist forces in a communique issued after its spring meeting in Washington. The group’s steering committee maintained that all member countries were “aligned” on the need for free trade, but the changing language of these international statements tells a different story.
The IMF recognises that a growing appetite for protectionism, spearheaded by the new US administration and supported by an increasing share of Europe’s electorate, poses a threat to global growth. This is the mood music that will play as the UK negotiates its post-Brexit settlement.
Theresa May says she wants a global, outward-looking UK. If she can successfully pursue such a course she could buck the trend taking hold elsewhere and confound the critics of Brexit who see it as an insular and regressive step.
What’s clear is that advocates of the liberal world order face challenging times, no matter how much relief Macron’s lead currently provides.