Macron runs France like a CEO. His customers aren’t happy.

European elections were just around the corner, but Macron was already thinking beyond the ballot box. He wanted to discuss the rise of artificial intelligence, and he instructed the array of executives from tech companies and sovereign-wealth funds to “please be super direct."

One executive warned the voracious technology would require the world to double its energy supply. Another said AI would unleash a wave of job displacement. If Macron was fazed by the talk of economic disruption, he didn’t show it.

“Look," Macron said, “I think there is a strong consensus on what we have to do now: accelerate, accelerate, accelerate."

Throughout his seven years in office, Macron has kept his foot on the pedal, relentlessly revamping the French economy with tax cuts and labor market overhauls to make France an attractive destination for foreign companies and the global elite.

France’s economic makeover, however, has come at a steep political price. Beyond the gates of Versailles, many French voters say they have grown tired of Macron’s tendency to run France like a business rather than a country. His technocratic focus on France’s ability to compete in the global marketplace has done little to placate widespread anxieties over immigration and the rising cost of living.

Macron has also governed like a chief executive, advancing his pro-business agenda through directives rather than building consensus across French society. Since Macron was re-elected in 2022, his government has exercised article 49.3 of the French constitution—a measure that allows French presidents to circumvent the National Assembly—a total of 23 times, the most of any government in more than three decades.

Voters logged their disapproval by handing Marine Le Pen’s far-right party a commanding victory over Macron’s forces in elections earlier this month for the European Parliament, an assembly whose main power lies in amending or blocking EU initiatives. Rather than turn the page on what many considered a protest vote, Macron stunned France by deciding to dissolve the country’s own parliament and call snap elections for the 577-seat National Assembly.

Macron has cast the new vote as a moment of truth for France that would reveal whether voters actually support Le Pen’s nationalist, anti-immigrant agenda. It is a colossal bet, based on the assumption that voters choosing between a multitude of parties in the first round of voting on June 30 will eventually rally behind Macron’s party for the July 7 runoff.

The snap elections, however, are also turning into a referendum on “le macronisme." Polls show Macron’s party trailing Le Pen’s National Rally and a coalition of leftist parties that are keen to unwind many of Macron’s market friendly changes. One survey shows many of Macron’s candidates struggling to even qualify for the runoff, and Le Pen’s candidates landing as many as 305 seats, an absolute majority that would allow her to pick Macron’s next prime minister.

The vote doesn’t directly impact Macron’s ability to remain in office until his term ends in 2027, and Macron has said he won’t resign. But a defeat in national elections would severely hobble him and place National Rally at the threshold of power—just as the country scrambles to finalize preparations for the Olympics, which open July 26.

“He keeps saying he’s heard us, that he understands, he’s going to overhaul the country faster, accelerate. But we don’t want to go this way," said Emmanuel Ringuet, a 53-year-old technician at French carmaker Renault.

Public services were being gutted under Macron, Ringuet said, while his working-class town on the outskirts of Paris has been overrun with crime. At night he routinely hears explosions of powerful firecrackers lobbed at the local police station. A lifelong socialist, Ringuet said he is now considering voting for National Rally for the first time, adding: “It hurts me, but it’s for the common good."

Opening to market forces

From the moment Macron stepped onto France’s political stage he has stood out as an unapologetic globalist. He set out to prove the European Union, one of globalism’s grandest projects, could coalesce into a “sovereign Europe" with secure external borders and common defense. That transformation, Macron argued, had to begin with France itself. Macron wanted his country to lead Europe by example, reining in its sizable government spending and opening its cosseted economy up to more market forces.

“We are making reforms, we are changing the face of our country, but we are doing so with a European ambition," Macron said in an agenda-setting speech at the Sorbonne university after he was first elected in 2017.

Now in his second term, Macron has created jobs, stoked economic growth and drawn droves of foreign investors to the country. But he has struggled to provide the French public with a sense of security and sovereignty. Europe’s borders remain porous—allowing migrants to hopscotch around the continent—and a Macron bill aimed at toughening immigration laws inside France was largely struck down by the country’s constitutional court.

Macron is rowing against a nationalist current similar to those that produced Brexit in the U.K. and the rise of Donald Trump in the U.S. For many voters, globalization hasn’t delivered on its chief promise: that a rising tide of economic growth would lift all boats. Public services have languished under Macron’s cash-strapped government.

The EU—built on a foundation of free trade—is struggling to compete in a world of rising trade barriers as the U.S. and China unleash a torrent of subsidies and other measures to protect their economies. Many Europeans grew poorer in the aftermath of the pandemic, the inflation shock and Russia’s invasion of Ukraine.

The spending programs Macron enacted to soften the impact of these crises have blown a hole in France’s public finances. Voters were shocked in March when the national statistics agency widened France’s 2023 budget gap to 5.5% of economic output, compared with the government’s forecast of 4.9%. Then, in April, the government was forced to revise its forecast for this year’s deficit, raising it to 5.1% of economic output from 4.4% of GDP. Rating firm Standard & Poor’s responded by downgrading France.

Whoever Macron picks as prime minister—which isn’t straightforward if no party wins an outright majority in the parliamentary elections—will have to scramble to find tens of billions of euros in budget savings.

Jordan Bardella, National Rally’s prime minister candidate, has said he plans to conduct a sweeping audit of public finances before deciding whether to lower the age of retirement back to 62 years old. Macron had raised it to 64 to push back pension payments. Bardella also plans to slash the sales tax on fuel and electricity.

The New Popular Front, the coalition of leftist parties, is campaigning on promises to roll back many of Macron’s economic overhauls. The coalition wants to lower the retirement age to 60; reinstate a wealth tax; dole out more housing benefits; and boost public sector wages, linking them to inflation. The measures, according to an alliance estimate, will cost €100 billion in 2025, or around $107 billion, and €150 billion in 2027.

Investors already have grown more wary of holding French assets since Macron called the snap election, driving up the government’s borrowing costs and adding to pressure on public finances.

“There’s this clash between what people want and what they can afford," said Andrew Kenningham, chief European economist at the London-based research firm Capital Economics. Investors had been expecting a steady stream of spending cuts until Macron’s term ends in 2027, he said, adding: “If instead you’re going to see spending rising, I think you’ll see a big selloff in the bond markets."

As Le Pen’s allies have increased their lead in recent polls, Macron’s office has been scrambling to reassure investors from Asia to the Americas.

“You have to nurture investor appeal. It gets destroyed much faster than you can build it," said one French official. “We’re mobilized and watching the market."

‘Super salesman’

When Macron was appointed economy minister in 2014 under then-president François Hollande, France was widely considered a hostile environment for investors. Corporate taxes made it expensive to hire employees while a thicket of labor regulations made it costly to fire them. Unemployment hovered above 10%, and economic growth was stagnant.

Unions wielded the power to bring the government to its knees with street protests and to turn corporate executives into public enemies. Investors watched in horror in 2015 as workers stormed the headquarters of Air France and ripped to shreds the suit jackets and shirts of two airline executives. One was forced to clamber, bare-chested, over a chain-link fence to escape the melee.

“That was the image that France had when it comes to doing business," said Ludovic Subran, chief economist at the German insurer Allianz and a member of an economic advisory council to the French government. “Macron knew that he could do better than this, and he put all his weight into being this super salesman for France."

Macron’s election as president in 2017 marked a realignment of France’s political establishment. He had run as a steadfast defender of France’s place in the EU and of the euro. Voters who had backed the mainstream socialist and conservative parties for decades suddenly rallied behind Macron, fearing a Le Pen victory would mean an exit from the common currency. They also handed Macron’s newly formed pro-business political party a commanding majority in the National Assembly.

Macron, a former investment banker, unleashed a barrage of market-friendly overhauls once he took office. He massively scaled back a wealth tax that had been established by President François Mitterrand, a lion of socialism, to finance welfare entitlements. A tax that had stood for three decades as a symbol of solidarity between the country’s wealthy and poor had suddenly crumbled. Macron followed that up with a decree that capped the severance pay employees can seek from their employers in labor tribunals.

It was against this backdrop that Macron began holding annual confabs at the Palace of Versailles, initially timing the event as a stopover for executives traveling to Davos, Switzerland, for the World Economic Forum. Executives ranging from Tesla’s Elon Musk to Jamie Dimon, chairman and CEO of JPMorgan Chase, leapt at the chance to be squired through the palace’s ornate interiors where Marie-Antoinette and Louis XVI once held court. Now Macron was in charge, and his mantra echoed through the palace halls: “France is back."

Companies responded by announcing billions of euros in investments across the country. Private-sector job growth accelerated. France saw net creation of industrial jobs for the first time since the mid-1990s. France has been the top spot for foreign investment in Europe for five years straight, according to Ernst & Young.

Macron’s appeal to investors, however, was becoming a liability at home, where opponents branded him a “president of the rich." Wealth inequality was on the rise as younger people were largely priced out of the housing market, particularly in city centers. Working and middle class families were pushed to the outer suburbs and rural areas.

“He was seen as this wonderful president abroad, and at home he was hated," Subran said.

Tensions boiled over with the yellow-vest movement of late 2018 when commuters rebelled against Macron’s plans to raise fuel taxes as part of his efforts to green the economy. Protesters smashed and torched storefronts across Paris, accusing Macron of punishing poorer families who had no choice but to commute by car.

The president’s lofty demeanor didn’t help things. Macron had once compared the French presidency to Jupiter, the ancient king of the gods, and his interactions with the public at times suffered from an apparent disconnect. When an unemployed gardener told Macron in 2018 about his struggles in finding a job, Macron cut him off and said: “Honestly—hotels, cafes, restaurants—I’ll cross the street and find you one."

Stagnant wages, migrants and inflation

Macron’s emphasis on employment was revealing. Throughout his presidency he maintained a laserlike focus on boosting productivity and creating jobs as the solution to France’s socio-economic ills. The jobless rate fell all the way to 7.1% in late 2022, the lowest level since 1982, excluding pandemic-related data distortions.

For the public, however, other metrics mattered. Wages had been stagnant for the better part of two decades, fueling widespread sentiment that the French middle class could no longer attain the living standards of previous generations, a phenomenon called le grand déclassement.

“Before, elections were always about unemployment. But now, no one talks about it," said Jean-Philippe Lapeyre, a small-business owner in Paris.

Immigration, meanwhile, was on the rise across the country with many migrants settling in the outskirts of large French cities or in smaller towns where housing was more affordable. Many came from North Africa, bringing with them Muslim customs that Le Pen and her supporters say clash with France’s strictly secular culture.

Philippe Maniere, a 58-year-old social worker, said the influx transformed the area around Dijon in Eastern France where he commutes to work. “I can see the town has changed, everyone can see things have gone wrong," he said, adding that he has seen a surge of violence in recent years. He plans to vote for Bardella in the coming elections.

French households fell further behind when inflation reared its head amid the pandemic and Russia’s invasion of Ukraine. Global supply chains were disrupted and restrictions on Russian oil and gas caused fuel prices to spike.

Macron responded to the pandemic by rallying the bloc’s leaders to reach a €750 billion spending package built around the EU’s first-ever issuance of common debt. The deal was hailed by some as the bloc’s Hamiltonian moment, referring to Alexander Hamilton, the first U.S. Treasury secretary, who had the newly formed federal government absorb the debts of U.S. states.

The leap forward in Europe’s economic integration, however, failed to resonate with consumers who were reeling from higher prices at the grocery store and gas pump.

“Given the price of fuel now, I’d be better off staying at home, unemployed and on welfare," said Maniere, who earns less than €2,000 a month.

Macron’s government put in place a national energy price cap and other measures that helped inflation remain lower in France than in many of its European peers. The moves, however, ended up costing the government €85 billion, according to one study by the French Senate.

Under pressure to repair the country’s finances, Macron took the fateful and deeply unpopular step of raising the retirement age in an effort to tackle one of the government’s biggest expenditures: pension payments. Millions of protesters poured into the streets in demonstrations that lasted months. The protests turned violent when Macron, who had lost his majority in the National Assembly, instructed his government to exercise article 49.3, bypassing parliament, to enact the measure.

The move handed his opponents a powerful argument: Macron, the globalist, was on a mission to dismantle France’s social model. It is a system that has long provided French workers with a safety net, from public healthcare and generous unemployment checks to subsidies that incentivize couples to have children.

As Macron came under siege at home, he faced a surge of economic nationalism in China and the U.S. Chinese manufacturers with Beijing’s support flooded Europe with electric vehicles, solar panels and other goods, as Beijing sought to export its way out of a manufacturing glut and weaker consumption at home.

The Biden administration, meanwhile, passed the Inflation Reduction Act, channeling hundreds of billions of dollars in subsidies and tax incentives toward manufacturers who operate in the U.S. The legislation broadsided Macron, who flew to Washington to warn Biden the U.S. subsidies would put Europe at a competitive disadvantage and hollow out the continent’s industrial base.

Macron’s options to counter the onslaught were constrained by the imperatives of the EU. The bloc limits member states’ subsidies of national industry in order to create a level playing field across its cherished single market. EU countries still adhered to World Trade Organization rules that, according to Macron, had been rendered moot by the U.S. and Chinese subsidy wave.

“It does not work to have a business model based on ancient rules and to be the only one to be compliant with global regulation. This is a wake-up call for the Europeans," Macron said.

He was speaking at the end of his Versailles summit last month before hundreds of executives who had gathered inside the palace’s cavernous Gallery of Great Battles. This was the same hall where Macron had hosted Putin at the start of the Frenchman’s first term, when relations were more conciliatory.

Now the mood was dark. Europe was at war. Looming over Macron and the executives were massive paintings of French rulers—from Clovis I to Napoléon Bonaparte—leading their armies on battlefields across the continent.

Europe’s “business model," Macron said, had been based on cheap energy from Russia, access to China’s consumer market for European exports and the security umbrella of its alliance with the U.S.

“These pillars of the European model are over," Macron said, adding that Europe needed a new playbook “in order to be competitive in a world of acceleration."

Write to Stacy Meichtry at Stacy.Meichtry@wsj.com, Noemie Bisserbe at noemie.bisserbe@wsj.com and Chelsey Dulaney at chelsey.dulaney@wsj.com