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Mar 3, 2017 | 00:00 GMT

French Elections, Future of the Eurozone & Russian Influence

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Stratfor Senior Europe Analyst Adriano Bosoni joins the podcast to explore the underlying forces at play in the French elections and what they could mean for Europe’s economic future.

Then Stratfor Senior Eurasia Analyst Lauren Goodrich and Europe Analyst Mark Fleming-Williams dissect Russian efforts to influence the outcome of elections in general and the upcoming French election in particular. We’ll also look at how the French are responding.

And Stratfor Chief Product Officer Ken Maranian comes by with a preview of what we can expect when the next generation Stratfor experience is unveiled this Spring.

Transcript

Ben Sheen [00:00:09] Hello, and thank you for joining us for this edition of Stratfor Talks, a podcast focused on geopolitics and world affairs from Stratfor.com. I'm your host, Ben Sheen. The next chapter in the future of the European Union comes when France holds its highly contested general election. With the fate of Europe's common currency and the potential for another referendum on EU membership in the balance, we'll speak with Stratfor's Senior Europe Analyst Adriano Bosoni, to understand the underlying forces at play. Other EU member states are not the only ones watching the French election closely. Stratfor's Senior Eurasia Analyst Lauren Goodrich and Europe Analyst Mark Fleming-Williams will come by to explore Russian efforts to influence the outcomes of elections in general, and the upcoming French election in particular. And we'll also see just how the French are responding. Then, Stratfor Chief Product Officer Ken Maranian joins the podcast to discuss the exciting new innovations coming soon for our readers at Stratfor.com. Thanks for joining us. With me today is Stratfor's Senior Europe Analyst Adriano Bosoni to talk about upcoming French elections. Adriano, in Europe, the question on everyone's lips is what is going to happen to France going into the elections, and then the impact on Europe from the elections. I was wondering if you could set the scene for me a little bit. You know, why are these elections so important for France and Europe, and who are the key players that we're seeing emerge at the moment?

Adriano Bosoni [00:01:42] Well, France will see a series of very important elections this year. First, France will hold a presidential election in two rounds in April and May. And then it will hold election for the National Assembly, the Parliament in June. Which means that during the next couple of months there will be a significant change in politicians and faces in the French leadership. And we have to keep in mind that the presidential elections and the parliamentary elections will take place against the backdrop of relatively low economic growth. The French economy is currently growing by around 1% which is better than during the worst years of the economic crisis, but it's still below the levels of economic growth that France saw in the 1980s or in the 1990s. And it's also leading with relatively high unemployment, which is currently at around 10% which is relatively high for French standards, and even for EU standards. At the same time, the elections happen against the background of social tensions. Migration remains a big issue in France. Over time, over decades, France has seen significant arrival of migrants who located on enclaves in France's largest cities, the famous which are often the place for riots, for crimes, and even in some case for radicalization. And this creates social frictions in at least two directions. On the one hand, the French feel that their identity is under threat. And of course, considering the recent terror attacks in France, Belgium, and other places,

Adriano Bosoni [00:03:28] they also think that their security is under threat. But the migrants themselves are critical of a political and social system that makes it very difficult for them to integrate into the French society. We have examples of second or even third generation struggling to integrate. And finally, this combination of relatively low economic growth and social tensions has lead to social discontent with the traditional parties. We've seen that a large number of French voters are tired of the traditional mainstream political parties and are supporting outsiders. And we see that opinion polls puts nationalist Marine Le Pen from the National Front in the first position. She's been around for a very long time, but she has never held office, so she presents herself as an outsider. We see former Economy Minister Emmanuel Macron in the second position. He has also been around for a while, but he quits the government just in time to present himself as a newcomer. And then we have other traditional parties falling behind the traditional center, right Republican party, and the Socialist party, and other left wing parties. But overall, we see the two or the three most important candidates are outsiders and are critical of the political establishment in the country.

Ben Sheen [00:04:49] And this is a trend that we've been seeing across Europe at the moment, isn't it? Is this wave of sort of nationalistic fervor and anti-immigration sentiment had lead to people having an opportunity in politics they might not have had before.

Adriano Bosoni [00:05:00] Exactly. Nationalist parties have existed in Europe for a very long time, for decades, but we have seen how in Europe the financial crisis evolved into an economic crisis, which in turn evolved into an employment crisis. And there are hundreds of thousands of voters across the continent that feel that they are not perceiving the alleged benefits of globalization, and that they resist the free movement of people, the free movement of goods, services, capital, which is a very serious situation for the European Union because those are the very same principles upon which the European Union was built. And we see that that will be a very important theme for the French election. According to opinion polls, Marine Le Pen will make it to the second round of the presidential election. According to polls, she will be defeated in the second election no matter who her rival is. But of course, we have seen with the Brexit referendum and with Trump's election in the US, that opinion polls have recently failed to identify or to measure the extent to which nationalist and anti-system feelings penetrate in the electorate. So I do think that it will be a very tight election, and the results will be much closer than what the polls currently predict.

Ben Sheen [00:06:27] And clearly one of the reasons why we're tracking this so closely is that there is an impact for the European Union and the Euro Zone. France is the Euro Zone's second biggest economy, and what happens, you know, France has a sudden change in direction or a change in policy, then that will have implications that will ripple out throughout Europe. So what do you think are some of the major implications we could see depending how the elections go?

Adriano Bosoni [00:06:49] Well, if we see a victory by the National Front, of course, the Euro Zone will be under massive pressure. The National Front is saying that it will hold a referendum on France's membership in the Euro Zone. And I think that if that happens, if there is a referendum, there is a serious chance that the Euro Zone collapses before the vote even takes place because people across Europe will not wait to know the result of the referendum to plan their moves. So the announcement of a referendum would probably trigger a run on many European banks because people in countries like Spain, Italy, Greece will be fearing that their savings could be converted into national currencies. So they will be trying to move their savings to safer places in Germany or maybe the United States hoping that their savings would not be converted into Spanish Peseta or Italian Lira, but into German Deutsche Marks, for instance. So there could be a run on European banks even before such a referendum takes place. And even if the National Front does not honor its promise to hold a referendum, other campaign promises such as the introduction of a tariff on imports, or taxing companies that hire non-French workers, go against the principles upon which the European Union was created. So one way or another, the whole system will be under massive threat. If the moderates win, of course this doomsday scenario will not materialize in in the near term. But even a moderate government will try to shake the status quo to introduce measures to make the French economy

Adriano Bosoni [00:08:31] more competitive, to try to reform labor legislation, and these kinds of things will generate resistance among tribunals and workers in general. The moderate government would also try to reform the European Union. We have seen strong criticism. Most mainstream parties are critical of the technocrats in Brussels, and they have said they will try to repatriate powers back to national parliaments. And of course, security and defense are very important issues for France. So no matter who is in charge, I think France will push for greater military and security cooperation in Europe.

Ben Sheen [00:09:12] Well certainly there's a lot to look forward to in 2017, and I mean, you reflected on a lot of this in a piece you did recently on Stratfor.com about a storm brewing over Europe. And it certainly seems like though those clouds are gathering over the continent at the moment. Adriano, thank you so much for joining me here today.

Adriano Bosoni [00:09:28] Thank you.

Ben Sheen [00:09:35] Here in a moment, we'll be joined by Senior Eurasia Analyst Lauren Goodrich and Europe Analyst Mark Fleming-Williams to explore Russian efforts to influence the upcoming French elections. But first, Joshua Cook sits down with Stratfor Chief Product Officer Ken Maranian to highlight some exciting innovations coming to Stratfor.com this spring.

Joshua Cook [00:09:57] Hi, I'm Joshua Cook, and I'm sitting here with Stratfor's Chief Product Officer, Ken Maranian, to talk about some of the changes and updates that we're about to unveil at Stratfor.com. Ken, thanks so much for joining us.

Ken Maranian [00:10:09] Yeah, thanks for having me.

Joshua Cook [00:10:10] I wonder if you give us a sense of what you're looking at and seeing as we move to this next generation for Stratfor?

Ken Maranian [00:10:17] I've been at Stratfor for about a year. And just about as soon as I got here, I go to see an amazing amount of activity going on, and I got to understand the process of all of the analytical work, and the rigor, and the passion, and the commitment that our team of researchers, and analysts, and writers, inside out of our members. I also got to look at the customer base, and read the comments that come in, and talked to the customers as well, and saw how passionate they are and committed to Stratfor, you know? We have a great following. So there's amazing internal strength and there's amazing pull from customers for the insights that we create here. But one thing that was clear was that we couldn't really serve it up in ways that customers needed to consume it. So right away, our minds kind of shifted to how can we build a modern platform that supports the consumption of insights, and forecasts, and analysis that's so critical to our customers in terms of how they make decisions, in ways that serve them better, right? In ways that make the content more consumable, and just more navigable. So, I'm very excited about this product, very excited, and I think our customers are going to love it.

Joshua Cook [00:11:31] We talk about that expanded user experience and ability to interact with content in new ways. Just to be clear, that goes much further than design updates and changes. What are we really talking about?

Ken Maranian [00:11:43] Yeah, you know, so design, right? A lot of the time, folks think about just kind of pretty colors and so forth, and we have some of those, right, in the new product. But the bulk of the investment has gone into how we create the forecast and analysis on our website. And once you kind of come to the website now with the new product, you're going to have many more options in terms of personalizing, customizing, and following the things that are most important to you. For example, if you are an individual interested in a particular region, right? And what's happening in the world around that region. Change, shifts in political power, and so forth, and what that means for you if you're a business person, if you have suppliers in that region, which many of our customers are professionals working in various capacities for companies and they need to know what's important to them. Well, the website wasn't very flexible that way before. It was a little bit sort of static in terms of what you could elevate, in terms of the most critical topics, themes, regions, that individual users are most concerned about.

Joshua Cook [00:12:50] That idea of themes, and that's one thing we're talking about. I mean how does that change the way people are going to consume information and use our analysis?

Ken Maranian [00:12:58] Our readers are, you know, very diverse and distributed across the globe. Some are professionals, some are academics, some are in government agencies, and so forth. And each one would like to consume insights that they need the most to do their jobs or to get what they need out of Stratfor's work. And so we're organizing our content in terms of broader themes. If I were to go to an average sort of news site where I may just see a whole bunch of individual news stories, and they may be by different folks with different points of view, and so forth, but that's not what Stratfor really does. Stratfor provides a framework and a context for folks to understand the world. And so our themes are a big part of that, right? Because when you do forecast, right, decade forecast, annual forecast, quarterly forecast, those forecasts have themes, and our analyses map to those themes. And so as a user, you'll now be able to take advantage of this taxonomy that sort of weaves together the most important events, the most important analyses, the trends, and changes, and shifts, and not view any particular event in and of itself, but through the navigation, through the user experience, be able to see how that event or that topic is tied to a broader movement in the world.

Joshua Cook [00:14:22] It's very exciting, and we're looking to seeing this here in this spring. Thank you so much for joining us and giving us an idea of what's to come.

Ken Maranian [00:14:29] You're welcome, thank you.

Ben Sheen [00:14:40] And here with me now is Senior Eurasia Analyst Lauren Goodrich. And joining her as well, we've got Economic and Europe Analyst Mark Fleming-Williams. And they'll both be talking to me about how Russia has been trying to influence the world, should we say? So, Lauren, Mark, we've seen a lot of evidence of Russia kind of spreading its tendrils in propaganda and misinformation campaigns globally, but through modern technology. I guess the question I have is what's Russia doing, and how is it doing it?

Lauren Goodrich [00:15:09] Yeah, so Russia, its greatest weapon is not its military, it's not its nuclear threat. Its greatest weapon is its disinformation campaign right now. We have seen the Kremlin increase funding for quote-un-quote foreign media spread and foreign information spread. It's been quadrupled in just this past year. That's a lot of money going towards something like that. This isn't a new tactic out of the Russians, of course. I mean the Cold War playbook was pretty much based on disinformation campaigns around the world. But also, information campaigns to back certain political causes. I guess you would say the really big example from the Cold War was back when Moscow really supported the leftist groups across Europe and the United States, particularly the environmental groups that spurred up a lot of protest movements and really destabilization efforts across Europe and in the United States. And so that's what we're seeing right now. We're seeing Russia spread information and disinformation via social media, via spreading its media campaign through its two giant media outlets, Artis and Sputnik. And we're seeing this spread really gain momentum and have some legs, and is really running across Europe and the United States right now.

Ben Sheen [00:16:27] So you give us some idea of scope. What countries, I mean, I guess specifically like in the Russian heartlands and Central Europe have we seen being affected, but also what countries are we likely to see influenced in the future?

Lauren Goodrich [00:16:38] We're seeing a lot of influence, of course, across the former Soviet states. However, there's some really big targets that Russia is really paying a lot of attention to at this moment because they're political hot spots. The United States, of course, was one of them back in the election. And now we're seeing a really big focus on areas such as like the Balkans, and the upcoming election in France, of course.

Ben Sheen [00:17:01] So this obviously came to a fore in the most recent US election scandal when there were accusations that Russia had insinuated itself through its cyber capability in the actual elections. And I know that there's a concern now looking forward to another democracy that is essential to Europe, and that is France. I guess, Mark, to what extent can Russia can influence French elections?

Mark Fleming-Williams [00:17:20] Well, that's the big question. So first of all, we see that Russia very much wants to. We've got evidence that they're trying to. I mean, the Russian outlets such as Sputnik have been provided a home to news stories which have cast dispersions on candidates which Russia is not so favorable to. There are studies that suggest that the internet bots on Twitter are all working overdrive to support the candidates that Russia does support. And so there's a lot of evidence to say that Russia is trying to affect the French elections. And the French seem to be taking the bait to a large extent. I mean, for example, a story which was run by Sputnik that cast dispersions on the status of Emmanuel Macron, who's the front runner, his relationship with his wife, and suggesting that he may be having a homosexual affair. He was actually forced to deny those allegations, and his spokesman has claimed that his campaign has been the subject to repeated cyber attacks from Russia. And even at a government level, the French foreign affairs ministry has condemned Russian interference in elections. The next French defense meeting is going to be on the Russian influence in French politics. The French worried about this, and they are sensing, and seeing, and feeling that Russia is attempting to affect the elections. So that is happening. I mean the interesting thing is that there are ways that you can discern Russians being able to have an effect, and there are ways that you can't in that, for example, the center right candidate Francios Fillon is currently struggling in the polls

Mark Fleming-Williams [00:19:04] and facing demands that he should pull out as a result of a scandal under which his wife was working for him and taking a salary, and there are aspersions cast as to how much work she was actually doing for him. That is a scandal which has taken down a very leading candidate for the French elections. But similar scandals which have blown up around the more far right candidate, Marine Le Pen, just haven't landed and haven't affected her in the polls, and she seems to be marching steadily onwards as much as she has been for the past, you know, four years.

Lauren Goodrich [00:19:40] And we're seeing Russian media really support Le Pen's drive. We're also seeing Russian media kind of blatantly push a lot of these stories against the other candidates, such as Russian media has been really pushing the claim that Macron is a US agent, for example. We're seeing Russia really kind of rally around one candidate at this time, but it's not exactly like they care about Marine Le Pen, and that they actually want her to win. It's more that we're seeing Russia just try to sow chaos. The disinformation campaign isn't always targeted on a single person or personality. That can be true from what we've seen out of the current US administration to where many people would argue that, you know, Russia really wanted Trump to win. But, since then, we haven't seen this great detente between Russia and the United States. And instead, we've seen the US media really turn on Russia. And so there is an overplay in your hand if you get the candidate you want out of Moscow. And so, instead I think that Russia is much more focused on ok, how much chaos can we sow in these countries so they're more internally focused on themselves instead of focused on Russia? As well as for a country like France, how much chaos can we sow in so the divisions within Europe as a whole start to really deepen.

Mark Fleming-Williams [00:21:00] No, I agree. And there is a certain amount of attempting just to sow anarchy and chaos. But the interesting thing is that Le Pen has held strong. But, and going back to whether the Russians actually have been able to take down candidates that they're not so favorable towards, Macron who is the candidate we've mentioned a couple of times now, is still the favorite to win this election. And he is very much, I mean, Le Pen we've talked about, had closer links with Russia and potential loans that have come to her party in recent years. Fillon, who's the man whose just suffered this great scandal was a Prime Minister along with Vladimir Putin at the end of the last decade, and has a much more favorable view of Russia than a lot of other French politicians, and has talked against sanctions in the past. So in theory, the Russians would want either Fillon, if not Le Pen, then perhaps Fillon to win. But it's Macron who is currently gaining out of all this chaos and all this anarchy. So I agree that potentially, that casting dispersions even on Macron, even if he wins, could potentially undermine France in the long run. But the interesting thing is that the Russians are attempting to affect this election, but it's not entirely clear that they're succeeding at the moment.

Lauren Goodrich [00:22:17] Yeah, and Russia has to be really careful because it can't overplay its hand. And I think that that's something that we are seeing in other areas such as the United States, in which now Russia's really becoming the spotlight for global disinformation campaigns. And that's something that could really create a global pushback on Russia. We're already seeing centers across Europe start to pop up on how do we counter Russian propaganda, and disinformation, and information spread. And then we're also seeing Moscow at home start to rethink how robustly they want to use their propaganda campaigns, even on their own people just because there is starting to be some of that population pushback on Moscow. On ok, we're not complete idiots, we understands that you're trying to influence us.

Ben Sheen [00:23:01] Well it sounds like as much as Russia is attempting to pursue its strategy of disinformation overseas and actually destabilize elections where it can, Moscow is going to have to look closer to home in the coming months and years as it goes through its own election process. So, Mark, Lauren, thank you so much for joining me here today to explore this complex issue. And certainly, we look forward to upcoming analyses on this from Stratfor.com.

Lauren Goodrich [00:23:22] Thank you.

Mark Fleming-Williams [00:23:23] Thank you.

Ben Sheen [00:23:28] That concludes this episode of Stratfor Talks. If you'd like to dig deeper into the underlying implications of France's upcoming elections, Russia's efforts to influence the outcome, and the future of the European Union, we'll include links to the latest Stratfor analyses and forecast in the show notes. We'll also include a link to more information about the next generation Stratfor experience coming this spring. If you have a question or a comment about the podcast, or even an idea for a future episode, let us know. You can reach Stratfor Talks at 1-512-744-4300 extension 3917, or by email at [email protected] And don't forget to leave us a review. We appreciate your feedback and your review also helps others discover the podcast. It just takes a few moments, and you can leave a review on iTunes or wherever you subscribe to the podcast. And for more geopolitical intelligence analysis and forecasting that brings global events into valuable perspective, visit us at Stratfor.com or follow us on Twitter, @Stratfor. Thanks for listening.

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