Agencies
The promises of French political parties ahead of the looming elections are appealing and expensive.
Vying to oust the centrist government of French President Emmanuel Macron in an upcoming two-round parliamentary election on June 30 and July 7, the parties of both the far-right and far-left are vowing to cut gasoline taxes, let workers retire earlier and raise wages.
Their campaign pledges threaten to bust an already-swollen government budget, push up French interest rates and strain France’s relations with the European Union.
“The snap election could well replace Macron’s limping centrist government with one led by parties whose campaigns have abandoned any pretense of fiscal discipline,’’ economist Brigitte Granville of Queen Mary University of London wrote Thursday on the Project Syndicate website.
The turbulence began on June 9 when voters handed Macron a defeat at the hands of Marine Le Pen’s hard right National Rally (RN) party in EU parliamentary elections. Macron promptly and surprisingly called a snap parliamentary election convinced that French voters would rally to prevent the first far-right government from taking power in France since the Nazi occupation in World War II.
Macron is aligned against both Le Pen’s National Rally and the New Popular Front, a coalition of far- to center-left parties.
“The center has kind of evaporated,’’ said French economist Nicolas Veron, a senior fellow at the Peterson Institute for International Economics (PIIE). The National Rally and the New Popular Front are “radical in very different ways, but they’re both very far from the mainstream.’’ The political extremes are benefiting from widespread voter discontent about painful price rises, squeezed household budgets and other hardships. The French economy is sputtering: The International Monetary Fund (IMF) expects it to eke out weak growth of 0.7% this year, down from an unimpressive 0.9% in 2023.
The political pledges to put money in voters’ pockets sent economists reaching for calculators. Their answer: The costs could be considerable, at least tens of billions of euros.
News of National Rally’s political ascendance sent France’s CAC 40 stock index tumbling to its worst week in more than two years, although the market calmed somewhat last week. Yields on French government bonds also rose on worries about the potential strain on government finances.
Macron acknowledged that National Rally’s economic pledges “perhaps make people happy,” but claimed they would cost 100 billion euros ($107 billion) annually. And the left’s plans, he charged, are “four times worse in terms of cost.’’ Jordan Bardella, the National Rally president gunning to become France’s prime minister in the election, played down the figure cited by Macron, saying it was “pulled out of the government’s hat.” But Bardella has yet to detail how much his party’s plans would cost or to say how they’d be paid for.
Likewise, the New Popular Front’s 23-page list of campaign pledges doesn’t cost them out or detail how they’d be financed. But the coalition vows to “abolish the privileges of billionaires,” taxing high earners, fortunes and other wealth more heavily. It says it doesn’t intend to add to France’s debts.
Far-left leader Jean-Luc Mélenchon, whose France Unbowed party is fielding the largest number of candidates in the coalition, says its platform would require 200 billion euros in public spending over five years but would generate 230 billion euros in revenue by stimulating France’s economy.
Bardella vows to slash sales taxes – from 20% to 5.5% – on fuel, electricity and gas, “because I think there are millions of French people in our country who this year can no longer afford to heat themselves or are forced to limit their trips.”
