France’s far-right Rally National (RN) party on Thursday pushed back against opposition accusations that the government’s spending plan would ruin the economy, while President Emmanuel Macron’s centrist bloc argued it was the only bulwark against fiscal mismanagement.
The nationalist, anti-immigration RN party is leading the opinion polls ahead of general elections scheduled for June 30 and July 7, with a newly formed coalition of left-wing and environmental parties in second place and Macron’s camp far behind.
Macron’s shock decision to call snap general elections after his party’s crushing defeat to the Liberal Party in European elections has plunged French politics, sent the euro and French stocks plummeting and pushed up France’s borrowing costs.
RN leader Jordan Bardella, who could become prime minister if his party wins a majority, sought to ease concerns about his party’s high-spending plans in a speech to France’s main employers’ body, the Congress of Trade Unions (MEDEF).
“I understand the need to reassure the public,” he said, pledging to launch an audit of the state’s finances to gauge his room for maneuver if he takes power before deciding how far and how quickly to push for reforms.
Bardella said Macron’s pledge to lower the retirement age from 64 to 60 would apply to people who started working before the age of 20, after he faced months of street protests calling for the age to be raised from 64 to 60.
He said the government will present a revised budget for 2024 in the summer and that its measures will also include cutting production taxes on companies.
Bardella said the European Union should cut spending and France should reduce its contributions to the bloc, and he also spoke about addressing financial loopholes that allow highly profitable companies to evade taxes.
Macron’s camp portrays both the RN and the new left-wing Popular Front coalition as wasteful and irresponsible, saying unfunded spending pledges risk increasing the national debt to unsustainable levels – France has been scolded by the EU for having too much debt.
“I can’t feel safe”
“There is zero budgetary space,” Finance Minister Bruno Le Maire said at a Medef event after Bardella’s speech, calling the RN and Popular Front policy proposals “insane.”
He said what investors care most about is stability, which only the ruling Together coalition can provide, and reiterated his commitment to returning the budget deficit to below 3 percent of GDP.
The Left Alliance also touted its economic policies in Médef, with Eric Coquerel of the far-left Stand By France party saying the extra spending would be paid for by economic growth and higher tax revenues from the wealthy.
“Overall, I don’t think our fiscal deficit will be worse than what the current administration is projecting,” he said. The Popular Front also wants to lower the retirement age.
“Nobody made me feel safe,” said Sophie de Menthon, head of Movement Ethic, a small employers’ association.
Earlier, Prime Minister Gabriel Attal had said that if Macron’s coalition remained in power beyond July 7, he would ease the burden on households by lowering electricity prices, reducing inheritance tax and linking pensions to inflation.
“Let’s not jump from a height into the unknown without a parachute,” he told a press conference, reinforcing his message that only the Together alliance can protect France’s democracy and economy from extremists on both sides.
“We will not raise taxes under any circumstances,” he said.
Attal released an election video that did not feature Macron, reflecting the president’s unpopularity.
Macron’s term of office is until 2027, and he cannot be forced to step down. Since the end of the war, France has experienced three periods of “coexistence” in which the government and the president had different political positions.
Markets have stabilised this week after the gap between French and German borrowing costs hit 80 basis points last week, the highest in seven years.
But investors are concerned about the possibility of a big-spending government led by the RN, as well as the possibility of political deadlock if no party wins an absolute majority and the balance of power makes it difficult to pass legislation.
French blue-chip shares are up 1.8% this week after plunging 6.2% last week, and the difference in borrowing costs between French and German 10-year government bonds is 72 basis points, down slightly after Thursday’s French bond auction.
