Does the bold "that" in the text refers to "the existence of an element of self-love in all relationships" or "all relationships"?
The introduction of the outside world interrupts this circuit, creating a rift which prompts the developing ego to look outside itself for satisfaction. In classical accounts
of narcissism, secondary narcissism is akin to a compensatory attempt to remake an unbroken circuit of satisfaction around the subject. Now while there is an element of self-love in all relationships that Freud deemed necessary, this secondary formation is, as we have seen in Lacan’s ‘The Mirror-Stage’, neurotic, dependent on the projection of an idealised selfimage, which Freud calls the ego ideal and which for Lacan is founded on lack (Art and Psychoanalysis by Maria Walsh).