The French do the European time warp again

Plus: The four Ds of the UK elections [Bloomberg]( This is Bloomberg Opinion Today, a diverting encyclical encapsulating Bloomberg Opinion’s opinions. [Sign up here](. Today’s Must-Reads - Ukraine’s [not ready]( to make peace. - Taiwan should [emulate]( Australia. - Big Solar is [bigger]( than Big Oil. - Caviar with your [sausage roll](? - Gone with the [tariffs](. - Private equity for the [public good](. “It’s Just a Jump to the Left And Then a Step to the Right” Grexit, Brexit and, once again, the specter of Frexit? European crises (2008, 2016 and right now) like to surprise “with a bit of a mind flip,” as the lyric from The Rocky Horror Picture Show goes. If only they were as much fun as the Time Warp number: “It’s just a jump to the left and then a step to the ri-i-i-i-ight.” Alas, what’s happening in France is not what one straight-laced character in the movie calls “folk dancing.” [YouTube: ROCKY HORROR PICTURE SHOW: Time Warp]( To be fair, Greece never left the European Union amid all the nerve-wracking negotiations over its financial crisis. And the far-right Rassemblement National is no longer talking about taking France out of the European Union (the lessons of Britain are all too obvious). Still, the dramatic showing of Marie Le Pen’s party in last week’s European Parliament vote shook things up for President Emmanuel Macron and his Renaissance party. He compounded the surprise — and the anxiety of the markets — by dissolving the legislature and calling a snap election. His rationale, as Lionel Laurent [summarized](it: “Taking the fight to the far-right, the thinking goes, will expose Le Pen and her 28-year-old No. 2 Jordan Bardella as being all opposition and no proposition.” It’s the sort of situation that gives investors heart attacks, especially since France doesn’t have to leave the EU to enjoy all the economic gyrations of Brexit. It has a time bomb whose ticking is still masked by political yelling. As John Authers  [writes](, “It’s very much less well-known that French corporate debt is even bigger than the US as a proportion of GDP.” That little financial fact is one reason why Macron’s move is risky. The French president could end up “gifting the Rassemblement the opportunity to convince voters that they can be trusted,” says John. And “ ​​​​with memories of the Liz Truss gilts implosion in the UK still fresh, the possibility of a crisis in France under aggressive new leadership looks real.” He says, “The record of gambits like this is patchy; ask David Cameron on Brexit, or his hapless successor, Theresa May, who attempted and failed to build her majority in 2017 by calling a snap election much like this one.” As Lionel says [in another column]( this week: “Financial markets are sensing weakness, with some French bonds yielding more than debt from Portugal; the likelihood is that the next government will have even less success in fixing tepid growth and stretched public finances.” He writes: “After years of benefiting indirectly from the UK’s mess and German recession, France may be reverting to type.” For now, political parties have mere days to put together their slates. And the likely government resulting from the elections will be a weird one. Already, Lionel — [in yet another column]( — senses a bumpy social media campaign scenario ahead as the country lurches toward a strange marriage of a Le Pen-led rightist legislature and Macron’s centrist presidency. As an experiment in the run-up to last week’s European elections, I created a TikTok account, clicked on a video on French President Emmanuel Macron’s official feed and then let the app’s suggested content from other users take over. The algorithm took me down what can only be described as a very Putin friendly rabbit hole: The first video said in bold letters that Macron had “declared war on Russia” by offering to train military instructors in Ukraine, while several others attacked him for not inviting Russia to D-Day ceremonies. One falsely claimed that an infamous civilian massacre in Nazi-occupied France in 1944 had been perpetrated almost entirely by Ukrainians. (I was also fed a rant about Jews controlling France by a convicted antisemite.) As Rocky Horror’s primal song goes,“Time is fleeting. Madness takes its toll.” Don’t do the time warp again. The Four Ds of the UK Elections Here’s a little more madness. The multi-party campaign to lead the next UK government won’t be decided till the 4th of July, but Adrian Wooldridge already has a [mnemonic]( for those perplexed by the roil. Think of it as the four Ds, one each for the likely victorious Labour Party, the ruling but ruined Conservatives, xenophobic upstart Reform and the curious Liberal Democrats. I’ll let Adrian speak for himself: In the spirit of our sound-bite age, I hereby summarize the main parties’ campaigns in a single word for each. For the Tories, it’s “disastrous,” for obvious reasons. For Labour, I would choose “dispiriting,” because Keir Starmer is cruising to victory without presenting a compelling vision of change. For Reform, “despicable,” because Nigel Farage has engaged in dog-whistle racism, most obviously with his assertion that Rishi Sunak “doesn’t understand our culture.” And for the Liberal Democrats? The word that springs to mind is “deranged.” Deranged because the leader of the last mentioned party — Ed Davey — is leading a strategy, as Adrian explains, “organized around a series of stunts,” which include paddle-boarding, biking downhill, playing drums for the retired. “Even the great cynic H.L. Mencken would have been shocked by the lengths to which Davey has taken his remark that ‘politics is the art and science of running the circus from the monkey cage.’” There may be method to the madness, but Davey doesn’t need it to increase his party’s presence in parliament. Sunak’s self-immolating Tories are giving him all the assistance he needs. Telltale Charts “What is the easiest way for China to take over Taiwan, confound its defenses and confuse its allies? Rather than an invasion — a costly and dangerous exercise that would trigger a military response from the US — the most likely option right now is what experts are calling a quarantine, which would take control of the island’s ports and devastate its economy. The new government in Taipei, and its international partners from Washington to Tokyo, need to wake up to this possibility and develop contingencies.” — Karishma Vaswani in “[China’s Coast Guard Is Its Secret Weapon Against Taiwan](.” Source: Center for Strategic and International Studies “It’s been a decade since the term “unicorn” was coined by Silicon Valley venture capitalist Aileen Lee to describe startups that reached a $1 billion valuation. …  Having reached a peak in the heady, liquid days of 2021, the number of startup unicorns being created globally is now in decline. …  Investors should maintain their focus on startups that have strong fundamentals as well as long-term promise. Here’s a new name for firms that fit the bill: thoroughbreds. These are companies bringing in at least $100 million in revenue annually, according to Saul Klein, founder of London venture capital firm LocalGlobe.” — Parmy Olson in “[Unicorns Ruled for a Decade. Tech Needs a New Beast](.” Source: Dealroom.co Further Reading A [weaker Modi]( = a stronger India? — Editorial Board Can [Britannia rule the waves]( again? — Lara Williams Hong Kong and Singapore are [apples and oranges](. — Shuli Ren [Cornering a market]( by another name. — Javier Blas The case of [the two-timing CEO](. — Christ Bryant Walk of the Town: Royal Wallace and Gromit Edition A few weeks ago, I wrote about the impact of the [new portrait of King Charles]( by the artist Jonathan Yeo. This week, animal activists decided that the monarch’s influence — embodied in what is currently the most famous painting in the world — merited an asterisk. They pasted an image of big-eared Wallace (of Gromit fame) over his painted face and added a cartoon balloon declaring, “No cheese, Gromit. Look at all this cruelty on RSPCA farms!” It was a reference to the farm accreditation system by the Royal Society for the Prevention of Cruelty to Animals — of which Charles is the royal patron —  that assures consumers that animals are humanely raised. The painting — which was behind a glassy layer of protection — was unharmed by the cut-and-paste assault. [YouTube: King Charles III painting vandalized ...]( On May 20, when I visited the Philip Mould & Co. gallery where the painting is displayed, there was no security personnel next to it, just visitors milling about. On Thursday, there was clearly someone keeping an eye on the Windsor visage. After the assault: The king, with additional security. Photograph by Howard Chua-Eoan/Bloomberg Before the incident, the king was reportedly so taken by Yeo’s work that he asked for the painting to be displayed for a spell in Buckingham Palace before it finally makes its way to Drapers’ Hall, the traditional home of the seven-centuries-old guild that commissioned it in the first place. Drawdown Thanks for hanging in there. Here’s a little riff on Parmy Olson’s [column](. ”With this little attachment, you’ll get Unicorn 2.0!” Illustration by Howard Chua-Eoan/Bloomberg Notes: Please send astute observations and feedback to Howard Chua-Eoan at hchuaeoan@bloomberg.net. [Sign up here]( and follow us on [Instagram](, [TikTok](, [Twitter]( and [Facebook](. Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. 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