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France's snap election: Understanding why Macron took the risk
With Emmanuel Macron’s approval ratings at a historic low, and far-right parties gaining popularity, could France’s upcoming election be its own “Brexit” moment? Mark Carney, former governor of the Banks of England and Canada and current UN Special Envoy on Climate Action & Finance, joins Ian Bremmer on GZERO World to discuss snap elections in the UK and France, the complexities of Brexit, and its ongoing impact on domestic politics in Europe.
“There are a wide range of aspects of the UK-European relationship which don't work,” Carney says, “There's massive red tape, for example, in agricultural products, massive red tape and delays at the border, the inner workings of a very interconnected financial system.”
Calling a snap election in France is a big risk, Carney explains, but after his party underperformed in the EU parliamentary elections, Macron wants a referendum from the French people. He’s betting that voters used the EU election to send a message but will vote more moderately in national elections closer to home. Meanwhile, Labour is expected to win big in the UK elections, but the aftermath of Brexit still looms large. But the geopolitics of 2024 are very different than in 2016 during the Brexit referendum.
“There's a range of things that could be made better if the UK government and the European government wanted to work together,” Carney stresses, “And it's all operating in a GZERO World.”
Catch GZERO World with Ian Bremmer every week on US public television (check local listings) and online.
What the France and UK elections mean for the West
Major Western democracies like France, the UK, Canada, and the US are on the verge of sweeping political change, but how will upcoming elections impact our collective ability to deal with the world’s biggest challenges? How will Western allies approach issues like climate change, the AI revolution, and cyber defense in an increasingly fractured world? Mark Carney, former Governor of the Banks of England and Canada and current UN Special Envoy on Climate Action & Finance, joins Ian Bremmer on GZERO World for a hard look at three of America’s closest allies: France, Britain, and Canada.
“We're operating in a world where security is paramount. You need resilience,” Carney tells Bremmer, “You need to look to those countries where you have common values and you need to reinforce them.”
Carney and Bremmer also delve into the strategic importance of the US-Canada relationship and how our neighbor to the north can be a reliable, strategic partner in many critical areas, including national security and climate transition. He warns Canadians and Americans shouldn’t “hit the snooze button” when it comes to strengthening US-Canada ties and stresses that Canada can be a critical partner in providing lean energy, crucial minerals, and AI expertise. As for Carney’s rumored political future as a potential Liberal Party leader? Well, you’ll just have to watch the interview to find out.
Catch GZERO World with Ian Bremmer every week on US public television (check local listings) and online.
How political unrest across the West will impact the world: A conversation with UN's Mark Carney
Listen: On this episode of the GZERO World Podcast, major Western democracies like France, the UK, Canada, and the US are on the verge of sweeping political change, but how will upcoming elections impact our collective ability to deal with the world’s biggest challenges like climate, AI, and cyber defense? Mark Carney, former Governor of the Banks of England and Canada and current UN Special Envoy on Climate Action & Finance, joins Ian Bremmer to take a hard look at three of America’s closest allies: France, Britain, and Canada.
Upcoming elections in France and the UK could mean big changes for the West, similar to the aftermath of Brexit. Carney says there are still many aspects of the UK-EU relationship that need to be recalibrated. He also stresses the strategic importance of the US-Canada relationship and Canada’s role as a reliable partner in everything from national security to critical minerals to fighting climate change.
Subscribe to the GZERO World Podcast on Apple Podcasts, Spotify, or your preferred podcast platform, to receive new episodes as soon as they're published.
Ian Bremmer addresses the audience at the second annual US-Canada Summit in Toronto on June 11, 2024.
Second annual US-Canada Summit focuses on security and trade
Toronto was the place to be this Tuesday for the second annual US-Canada Summit, co-hosted by Eurasia Group and BMO. The event featured a cross-border who’s who of speakers, including former Ambassador to Canada David Jacobson, Under Secretary for Policy at the US Department of Homeland Security Robert Silvers, Delaware Sen. Chris Coons, Illinois Gov. JB Pritzker, and Alaska Gov. Mike Dunleavy. Canadian political heavyweights included the premiers of Ontario and Saskatchewan, Doug Ford and Scott Moe, as well as federal cabinet ministers Mélanie Joly and Anita Anand. UN Climate Envoy and former governor of the Bank of England Mark Carney gave the closing keynote, and both the US and Canadian Ambassadors, David Cohen and Kirsten Hillman, shared the stage. A full list of speakers can be viewedhere.
This year’s themes were the economy and security north and south of the 49th parallel. A major focus was the shift from global to regional blocs in international trade. While Eurasia Group President Ian Bremmer reassured the crowd that “Globalization is not falling apart. We are not heading to a Cold War here,” the Chairman of Cynosure Group and former Vice Chair of the Federal Reserve Randal Quarles took a more skeptical view. “If you’re a 55-year-old furniture maker from Hickory, North Carolina, globalization is never going to be better for you,” he said. The hollowing out of the working class and its impact on politics featured prominently, from the possibility of a second Trump administration to the recent right-wing victories in European Parliamentary elections.
Geopolitical tensions were also on the menu. Speakers touched on the wars in Ukraine and Israel, with Joly underscoring that US President Joe Biden’s proposal is “fundamental” to resolving the latter conflict. China loomed large in the conversation, with Silvers discussing how the US Department of Homeland Security is securing America’s ports by engaging Japanese firm Mitsui to replace Chinese cranes currently dominating port infrastructure. Ford emphasized that “China has the nickel market cornered. You know where the last safe haven is? Here in Ontario.” The Ontario premier concluded his presentation in his trademark style by giving the crowd his phone number (and no, we’re not going to publish it here).
Several speakers emphasized the need for energy security, including securing the supply chain for critical minerals necessary to build EVs. According to Dunleavy, as the world order shifts from a globalist to a regionalist perspective, North America can prosper by securing both its domestic supply and transformation. Moe emphasized that “If we get our energy security, we’ll have our food security, we’ll have our national security. But it starts with energy security.”
Finally, speakers discussed the post-COVID employment landscape and the impact of AI. Jonas Prising, chairman and CEO of ManpowerGroup, said that remote work is here to stay for the world’s knowledge workers. Eurasia Group released a new survey, which found that when asked about job automation, 17% of respondents believe almost all or most of their work could be done by machines, 28% say some of it, and 31% think not very much or almost none. The remaining 24% reported that they do not have a job.
Carney concluded the conference by underscoring the need for an inclusive economy and the importance of a growth mindset, particularly in Canada. “We need to build an economy for all Canadians. We can’t redistribute what we don’t have. We have less to spend because we’ve become less productive.”
Keeping the trains running on time was GZERO Publisher Evan Solomon, who served as event MC while Eurasia Group Advisors Gerald Butts and John Baird and Director Shari Freidman moderated several panels. And in true Canadian form, hockey was a running theme for the day, starting with BMO CEO Darryl White citing the Gordie Howe Bridge as a testament to the strength of the Canada-US trade relationship, and finishing up with Carney wishing the Oilers good luck in the Stanley Cup finals. Based on the way they played last night, they’ll be needing it.
Who’s afraid of Mark Carney?
Mark Carney set the cat among the pigeons last week with a speech that gently criticized the government of Prime Minister Justin Trudeau and tore a strip off of Conservative Leader Pierre Poilievre.
Carney, the former governor of both the Bank of Canada and the Bank of England, wants to be Canada’s prime minister, so he is letting it be known that he might do a better job than Trudeau while warning against the alternative.
Carney said Trudeau is spending too much money and is insufficiently focused on productivity — something most business people and economists think — but compared the prospect of a Poilievre victory to Brexit, which turned out to be the disaster he warned against.
“Brexiters promised that they were going to create Singapore on the Thames,” he said. “The … government actually delivered Argentina on the Channel.”
After the speech went live, a Liberal close to Trudeau messaged me a clip in which Carney used a series of catchphrases you’d expect to hear at Harvard Business School: “Hinge moment; dynamism; mission-oriented capitalism; combining resilience and purpose; mission institutions; seize the advantages.”
“These are all things Mark Carney said in 30 seconds or so,” the Liberal wrote. “That speech Carney gave is stuffed with more $5 bills than a vendor’s bag at the Jays game. Pierre will cream him.”
A threat from within
Some around Trudeau are uneasy about Carney’s high-profile outings. Liberals outside Trudeau’s circle are starting to think it might be nice if the prime minister spent more time with his family, because Canadians are so tired of him. He has been trailing Poilievre in the polls since Poilievre became leader in 2022. Trudeau just rolled out a CA$53 billion budget that so far has not moved the polls — an indication that Canadians have tuned him out. Some Liberal insiders hope Carney will take over and save them from the drubbing that Poilievre is getting ready to deliver in the next election.
But this is not what Trudeau’s people want. They point out that Carney has no experience in retail politics and may think Canada should be run like a central bank, where remote technocrats with degrees from elite universities make wise decisions without worrying about the grubby business of building political support. They are worried that the banker will lead the party to an electoral disaster.
Savior in the wings
Trudeau is not likely to be ousted, Liz Truss-style, since he single-handedly built the modern Liberal Party, and there is no rival in his caucus. But if Carney looks like a savior waiting in the wings, pressure will mount for Trudeau to hit the lecture circuit. Over the years, there has repeatedly been talk about Carney joining Trudeau’s team, but insiders say Trudeau — who may not have wanted to share the spotlight — would not promise Carney a role on the front bench. So now he is outside, loitering, waiting for a chance to run Canada, and Canadians are interested in what he is saying.
Carney’s video attack on Poilievre got three million views online, which is pretty good for a Canadian political video. The Conservatives responded by demanding Carney be summoned to testify at the Commons finance committee. “Canadians deserve to know how much Carney will increase Trudeau’s carbon tax, how much more debt he will add, and whether he would destroy Canada’s energy sector,” the party said.
When MPs from other parties sensibly declined to summon Carney, a private citizen, to the committee to be berated, Conservatives made a show of being furious. It was a stunt, meant to show Conservative contempt for the man who might replace Trudeau and lead the Liberals into the next election. But it also reflected real fear and loathing.
A threat to Poilievre
“The biggest thing that I think keeps Pierre Poilievre up at night right now is the thought that Justin Trudeau might leave,” a Conservative insider told me. “That scares him because he thinks it's an easy win right now. Canadians right now are thirsty, hungry, dying for change. A new leader of the Liberal Party is change. So that is a huge, huge threat to Poilievre.”
Poilievre is a fearsome political attack dog. On Tuesday, the Speaker threw him out of Parliament for calling Trudeau a “wacko.” He is happy to use populist rhetoric against Carney, portraying him as a “Davos elite” and accusing him of hypocritically imposing the cost of climate policy on ordinary Canadians while personally profiting from pipelines through his role as chair of Brookfield Asset Management, where he is in charge of environmental, social, and governance investing. Since 2020, Carney has been UN Special Envoy on Climate Action and Finance, working to make financial markets move the world toward a net-zero energy system — which is not popular with some folks in the oil patch.
Poilievre’s people say confidently that they would love to run against Carney, that he would be a perfect symbol of the regime they wish to replace, but they are behaving like they are worried, and for good reason. Carney is an astonishingly successful person, a smooth and thoughtful public speaker with decades of experience at the highest level of economic management. If he takes over, he could jettison unpopular Trudeau policies and present a fresh face to the electorate, offering safe hands.
Or … he could be a disaster, brittle, smug, and inclined to lecture, presenting himself as a potential CEO, not a leader. We can’t know unless or until he runs.
But he is becoming the obvious Liberal alternative to Trudeau, and the Conservatives, by attacking him, will help make that clear not just to their supporters but also to progressives thinking about who should replace Trudeau.
Mark Carney sees more problems than solutions emerge from Davos
Davos is a good place to recognize problems but not such a good place to solve them, according to Lord Mark Malloch Brown, a British politician and diplomat who was in the Swiss Alps this month. “A new generation of modest, listening and empathetic leaders is needed – the antithesis of Davos Man,” he tweeted.
The World Economic Forum has steered so far to the north of public opinion that it is now being used as a punchline – the New York Times noted that “the Davos Consensus” is now a counter-indicator of what is likely to happen. “Trump is already the president at Davos — which is a good thing because the Davos consensus is usually wrong,” said Alex Soros, son of George and chair of the Open Society Foundation, on a panel at this year’s forum.
Yet, there is a reason why 3,000 of the world’s most powerful people make the mid-winter trek to Switzerland every year and line up in the cold to pass through security outside the Grandhotel Belvédere: It’s valuable to understand what the global elite is thinking and to recognize the many problems the world is facing.
GZERO Media caught up with Mark Carney, former governor of the Bank of England and Bank of Canada, who now serves as chair of Brookfield Asset Management and Bloomberg Inc. (as well as acting as a UN special envoy on climate change), to hear what he picked up in Davos.
Economic optimism
On the global economy, the general feeling was of a resilient US economy contrasting with a stagnant Europe, particularly as Germany goes through a historical industrial restructuring moving away from a model built on cheap gas from Russia and exports to China.
The general outlook for China was bearish, with the downside of its ongoing real estate adjustment outweighing the boost from China’s growing competitiveness in electric vehicles and clean energy and its efforts to rebuild exports at a time when supply chains are being “de-risked.”
Premier Li Qiang told Davos that China’s economy is open for business, but Reuters reported that investors who attended a closed-door lunch with him remained skeptical about China’s charm offensive.
This points to more stimulus, Carney said. Indeed, Bloomberg reported last week that the Chinese government is considering a rescue package for slumping stock markets (the CSI 300 was down 11.4% last year, its third year of negative growth, while Hong Kong’s Hang Sen was down 14% in 2023).
On monetary policy, Carney said the expectation among many attendees was that interest rates have peaked but that there was only limited appreciation that the pace of reductions may be slower than the market has been pricing. During Davos, market expectations were that the Fed would begin cutting in March and then cut again another four or five times this year. But Carney believes the Fed will probably wait until June to begin cutting, followed by another one or two cuts this year. “However, if that’s because the US economy is stronger than expected, it would be net positive,” he said.
Global crises
Geopolitics weighed heavily in the Swiss Alps. While US-China relations appear to have stabilized in the short term, the Middle East conflict was widening alarmingly. Reuters reported that there were no practical advances on a Palestinian state, or even a cease-fire, at Davos.
The head of the Palestinian Investment Fund estimated that $15 billion would be needed just to rebuild houses in Gaza. Arab states said they would not fund reconstruction until there was a lasting peace, by which they meant a Palestinian state.
Yemeni and Iranian officials told Davos audiences the attacks in the Red Sea would not stop until Israel ended the war in Gaza. The CEO of oil giant Saudi Aramco warned that the world might see a shortage of oil tankers if the attacks continue, forcing shippers to choose longer alternative routes.
Bankers warned that increased shipping costs and the possibility of an oil price rise could prove inflationary. And attendees took note of the comments of Saudi Arabia’s Prince Turki al Faisal that “the present leadership of Hamas, the PLO, and of Israel should be excluded from any participation in any future political role.”
Good AI vs. Bad AI
AI was everywhere, with businesses focused on how to implement it, first in basic administration and more profoundly in re-engineering the production, sales, and marketing. The core question of whether workers will benefit — and when — was more hotly debated. Some, including the IMF, saw widespread disruption to jobs (up to 40% according to the Fund). The techno-optimists pointed to the ability of AI to re-skill workers rapidly and past experiences with major technological changes that belied the ‘lump of labor fallacy.”
Carney felt that AI would begin to have major impacts on productivity and growth by the end of the decade and that, history teaches, it would take a comprehensive response of business, government, and academia to ensure that workers share in the benefits.
Climate change
Coming less than two months after what was regarded as a business-heavy, successful COP28 in Dubai and with AI dominating much of the discussion, the climate change debate was relatively muted. But Carney said it would be a mistake to consider that the transition has been relegated down the agenda.
He said that it is now so core to the fundamental business model of most companies that it has become embedded as a driver of competitiveness.
Carney noted that five years ago, $500 billion was invested in the transition; last year, that number was $1.8 trillion, nearly double what was invested in oil and gas. The challenge is that this number needs to more than double again to about $4 trillion by the end of the decade.
He said that the transitions toward clean energy and AI actually work in tandem since, while AI is relatively capital-light, it requires a lot of data and computing power, which in turn requires clean energy. And AI solutions will help with optimizing grids, heating and cooling systems, and even supply chains.
It was noticeable that the backlash against Environmental, Social, and Corporate Governance, or ESG, meant it was rarely mentioned in Davos. Attendees like Canadian Deputy Prime Minister Chrystia Freeland were more focused on the new buzzwords – “supply chain resilience” – trying to convince investors that Canada has the critical minerals and clean energy they need, as businesses try to diversify sources away from China.
Sustainability is now about “resiliency building” that contributes to profitability, not just altruism.
Milei’s message
Javier Milei, the new Argentinian president, burst onto the main stage at Davos like an arsonist with a blowtorch, lambasting the proponents of state intervention and concluding with the rallying cry: “Long live freedom, damn it.” He said the Western world is facing a significant threat because its leaders have been co-opted by a worldview that leads to socialism and economic deprivation.
“We are here to tell you that collectivist experiments are never solutions to the problems that affect citizens. Trust me, no one is better than Argentina to provide testimony on this,” Milei said.
At the time of Milei’s inauguration, annual inflation stood at 143%, the currency had plunged, and four out of 10 Argentines were living in poverty. He has promised radical reforms, including deregulation and devaluation of the currency, and there was no evidence that he was prepared to dilute his agenda in his speech.
He was scathing about “neo-Marxists” who have “co-opted the common sense of the Western world” when it comes to the climate change agenda and said he considered all talk of “market failure” to be an oxymoron.
Carney has considerable experience in navigating market failures, having been in the Cash Room meeting in the US Treasury as Bank of Canada governor during the financial crisis, alongside other G7 finance ministers and central bankers, when the decision was reached to backstop the banking system with liquidity to prevent a repeat of the Great Depression.
“All ideologies are prone to extremism, and capitalism loses its sense of moderation when the belief in the power of the market enters the realm of faith,” he wrote in his book, “Values.” “There are no libertarians in a financial crisis.”
But he said he found Milei’s speech to be entertainingly provocative. “It was good theatre and raised some important issues,” he said, particularly his praise for entrepreneurs and his assertion that state control does not depend solely on owning the means of production but can include regulation. Carney noted, however, that Milei appeared oblivious that he was speaking to some of the world’s most successful entrepreneurs (such as Bill Gates), few of whose actions echo the “Atlas Shrugged” school of poverty elimination.
Carney concluded that, “where you stand depends on where you sit,” and that Milei’s vehemence was undoubtedly influenced by a long history of high levels of state intervention and indebtedness in Argentina.
After his speech, Milei sat down with International Monetary Fund Managing Director Kristalina Georgieva to discuss Argentina’s debt problems. He remained defiant: “Free enterprise capitalism is the only tool we have to end hunger and poverty,” he said.
Milei will have to face down entrenched opposition from those who rely upon rents from the state apparatus if he is to rid his country of the unwanted tag of the “Argentina paradox,” the world’s most glaring example of a developed economy that went backward.
Join our livestream panel Wed 9/16: Net Zero: Climate Ambition and Action
On Wednesday, September 16th, GZERO Media — in partnership with Microsoft and Eurasia Group — kicks off a series of livestream discussions about the most important issues facing the 75th UN General Assembly. The first event, Net Zero: Climate Ambition and Action, will consider how we get to net zero emissions.
Our panel will be moderated by Julia Pyper, host and producer of the Political Climate podcast, and will include Gerald Butts, Vice Chairman & Senior Advisor, Eurasia Group; Lucas Joppa, Chief Environmental Officer, Microsoft; Rachel Kyte, Dean of The Fletcher School, Tufts University; and Mark Carney, Finance Adviser to the UK Prime Minister for COP 26 and UN Special Envoy for Climate Action and Finance.
On the day of the event, visit https://www.gzeromedia.com/unga/livestream to view the livestream presentation.
Net Zero: Climate Ambition and Action: Wednesday, September 16th, 12:30p ET/9:30a PT/5:30p BST
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