The eyes of the world were on France Sunday for the final round of its presidential election. While both candidates were outsiders to France’s mainstream political parties, ultimate victor Emmanuel Macron is seen as centrist, pro-business, cosmopolitan and socially liberal, while his opponent, Marine Le Pen, has been characterized as far-right, populist, anti-immigrant and anti-EU. The stakes of this election were high for many reasons both inside and outside the country, in part because Le Pen had said that she wanted to severely reduce or end France’s involvement in the EU and the Eurozone.

This is a fateful election not only for France, but also for Europe and the world,” said Wharton Dean Geoffrey Garrett as he introduced Gérard Araud, the ambassador of France to the U.S. In a recent talk at Wharton that took place shortly before the election, Araud shared his prediction about the outcome as well as his thoughts about the rise of populism and nationalism in Europe — trends reflected in Le Pen’s candidacy, Brexit and the election of Donald Trump.

Comparing the current French political environment with that of America, he said, “The polarization of political parties is such that it will be certainly very, very difficult for a lot of people from the left — and a lot of people from the right, by the way — to vote for Macron.” He noted that the leading candidate on the far left, who had lost in the election’s first round, had refused to endorse Macron. That was one sign of France’s polarized atmosphere.

He said if pressed to predict a result, he would say “70% [Macron] will win” — and Macron ultimately won a better-than-expected 66% of the vote. A win by Le Pen, Araud said, would have put the financial stability of Europe in jeopardy.

“If Madame Le Pen is elected, she has said… that she wants France out of the European Union, or France out of the Eurozone…. The day after she’s elected, everybody will basically move their money from France,” he said. He likened the situation to Greece around 2010 when people believed Greece might stop using the euro, and a financial crisis ensued.

(For more on the outcome of the French election, Knowledge at Wharton spoke with Wharton’s Joao Gomes and HEC business school’s Olivier Chatain after the results were announced.)

A Real Crisis

“Never have the political life in the U.S. and the political life in France been so comparable,” Araud noted, saying we are “facing the same rebellion of part of our citizens.” He added that this phenomenon could be seen in other Western democracies, too. Populist ideologies are on the rise.

“This is a fateful election not only for France, but also for Europe and the world.” –Geoffrey Garrett

Some voters are simply saying that they are disillusioned with both the political left and the right, and they are ready to just roll the dice, he pointed out. There is a profound divide between this group and the group he referred to as “elites”: better educated with a higher standard of living — a category in which he includes himself.

He noted that during last year’s election, “Washington, D.C., voted 94% for Hillary [Clinton] … even the Republicans voted for Hillary.” Those who voted for Trump are simply dissatisfied, he said, and those who voted against him have not paid attention to this dissatisfaction and the real crisis people are experiencing.

He elaborated that because of automation and globalization, massive job loss is imminent. For example, a huge number of Americans — 3.5 million — are truck drivers. Many truck routes are standard and don’t vary much day to day, and the driverless truck now looms on the horizon.

“What are you going to do with the truck drivers?” asked Araud. “Immediately, people will say ‘retraining.’ Well, good luck. What are you going to do with a 45-year-old truck driver? How are you are going to retrain him — to do what? That’s really the question.”

Free trade is another cause of working-class woes, he said. It has always been known there would be job losses in some places and job increases in other places, but the general belief was that the net would be positive. “Unfortunately, the people who are suffering have been suffering, and now they say enough is enough.”

Garrett agreed: “The economics textbooks are right that there are aggregate economic benefits from globalization, but it also generates losers, and we haven’t been thinking nearly hard enough about … the roots of the issue.”

Araud added that we should not treat free trade as if it were business as usual — only focusing on the economics — but we must also consider social and environmental concerns. “The rebellion is not going to subside overnight. It will subside only if you address the question.”

It will take people with imagination, boldness and selflessness to tackle the problem, he said, recommending that Europeans and Americans work together to find common solutions.

Being French or American

Woven into the economic roots of populism, Araud noted, is a sense of nationalism: what it means to be French, what it means to be American. “The expression of economic crisis is very often in terms of national identity.” This often leads to questions about immigration, and in this case Muslim immigration, which was a flashpoint in the U.S. election, Brexit and now in France.

“Never have the political life in the U.S. and the political life in France been so comparable…. We are facing the same rebellion of part of our citizens.” –Gerard Araud

Araud, whose considerable experience with the Middle East includes having been the French negotiator on the Iranian nuclear issue from 2006 to 2009, discussed some of France’s challenges regarding its Muslim community. He noted that France has a larger Muslim population than the U.S. (8% as compared to 1.5%) and the demographics are different. Garrett explained that U.S. Muslims tend to be more highly educated and geographically dispersed, whereas in France the opposite is true. The Muslim population is young, less well-educated, and concentrated on the edges of cities, which he called “an enormous challenge for all political parties.”

Araud noted that unemployment among this group is an ongoing problem. France’s rate of unemployment has hovered at around 8% for the last few decades, but is now at 10%. And as usual in any country, he said, the people who are immigrants, or the most disadvantaged socially and economically, are the first victims of unemployment.

He identified several other challenges to assimilating followers of Islam into the secular, liberal democracy that is France today. (Overall religious practice in France is at a low 4.5%, he noted, and France is no longer a Christian country.) For one thing, a wave of religious fervor moving through Muslim countries is distinguishing the second and third generation of Muslims from the first generation.

Araud described visiting Egypt in the 1970s: “Nobody, no woman, was wearing a veil…. You [might easily] be in the south of Spain, the south of Italy … there was no such difference. Go to Cairo right now and you’ll see the difference.”

And while the trend toward Islamic religious practice increases, France lacks the facilities to accommodate it. While French Christians and Jews have inherited thousands of churches and synagogues, he said, there are virtually no mosques. The French state today, because it is officially secular, cannot finance a mosque. Nor can it use funds to train imams “to be able to cater to Muslims in a liberal democracy.”

According to Araud, there are ongoing efforts in France to find solutions, even as the society struggles to cope with demands from some Muslim factions. “We have people coming to us saying, ‘We want to have a swimming pool day for girls.’ Or, ‘We don’t want women examined by male doctors,’ [or] ‘I don’t want my daughter to go to the gym.’” The problem, he said, is “you have to draw the line somewhere.”

He added, “As you can guess, in a period of political polarization, at a time when hundreds of French have been killed by Islamic terrorism, the way the French society is reacting to this challenge is not always the best way.”

“What are you going to do with a 45-year-old truck driver? How are you are going to retrain him — to do what?” –Gerard Araud

Muslim immigration and religious practice was a hotly debated topic in the French election, with Le Pen favoring banning headscarves (and yarmulkes for Jews) in all public places. She also favors a ban on burkinis, a type of Islamic modesty swimsuit.

Campaigning for Change

Working-class dissatisfaction with the status quo has made a campaign message of change very appealing in both the U.S. and France, said Araud. He noted that in the U.S. 2016 election, more than 200 electoral districts went from Obama to Trump. This has been surprising to many, but “when you go and meet these people, they simply said, Obama was change, Trump is change. So there is really this aspiration for change … against the elites, against the traditional way of conducting politics.”

He noted that in the French election this year, for the first time the candidate perceived as representing change is the centrist, Emmanuel Macron, as opposed to the far right. Unlike Le Pen, Macron has never held elected office and is new to the political landscape. Araud characterized his campaign as “the liberal, open-society, pro-European platform.”