(Bloomberg) — Far-right and far-left political forces vying for power in France have offered competing plans with few details for fixing the country’s finances, facing a hostile reaction from entrepreneurs.
Most read articles on Bloomberg
With just 10 days to go until the first round of snap parliamentary votes called by President Emmanuel Macron, a campaign in Paris organised by the country’s business lobby group Medef grilled candidates seeking to oust the head of state’s party from power.
A combative atmosphere was in the air even before the conference began, with the organisation’s president, Patrick Martin, giving an interview to Le Figaro in which he harshly criticised the election campaign programmes of Marine Le Pen’s far-right National Rally party, which is currently leading the opinion polls, and the Left Alliance.
“It’s always fun to wake up in the morning and find that an hour later I’m being described as dangerous by the person who invited me to debate,” Jordan Bardella, Ms. Le Pen’s candidate for prime minister, joked at the start of his speech.
As they spoke, France sold its first government bonds since President Macron sparked financial market turmoil by calling parliamentary elections, a day after the country was reprimanded by the European Commission for failing to rein in its budget deficit. The backdrop underscores how much attention is being paid to the possibility of political turmoil in the euro zone’s second-largest economy.
The challenge for France was laid out on Thursday by the Institut Montaigne think tank, which said the election pledges of the three competing political groups running in the election would each cost more than 10 billion euros ($10.7 billion) a year in spending power alone.
“We’re faced with a program that is electorally appealing but essentially proposes only new spending and no funding for measures,” said Lisa Thomas-Darbois, the report’s lead author, referring to the far-right and left groups’ proposals. “So that could really shake up markets.”
The most dramatic of these plans came from the left-wing New Popular Front group, represented at the meeting by the inflexible far-left former parliamentary finance chairman Eric Coquerel from France, and Boris Vallot, who led the Socialist party in the lower house of parliament.
His coalition government with the Communist and Green parties has proposed a steep increase in the minimum wage, reinstating a wealth tax scrapped by Macron, changes to income tax, eliminating tax credits for polluting industries, price controls on some essential goods and reversing pension reforms.
The program could cost about 88 billion euros in fiscal easing, Bloomberg Economics’ Eleonora Mabroeidi and Maeva Cousin wrote in a report.
Vallot vowed to scrap some tax cuts to give the government “more room to maneuver”. Cockerell defended the minimum wage increase, though he acknowledged it would be a “big shock” for businesses, and argued that France would have more leverage and support from other countries if it tried to renegotiate European Union fiscal rules.
“We can ease constraints without leaving the euro,” he said.
They promised to publish details of their budget plans by the end of the week. There were boos as Cockerell concluded by complaining that the economy was too finance-driven and drawing a distinction between value creators and disinterested people who only care about stock prices.
Mr. Bardella, meanwhile, appeared accompanied by Eric Ciotti, whose conservative Republicans are trying to oust him from office after he held talks about cooperation with the far right. On the way to the meeting, Mr. Bardella blasted Mr. Macron for scaring investors.
“The initial panic in the markets was around a breakup. Ask President Macron why he thought it was a good idea,” he told Bloomberg TV’s Caroline Conant. “I don’t think it will bother the markets for too long because our policies are not going to bankrupt the country. France will continue to be a safe investment.”
Mr. Bardella’s plan includes measures to cut energy bills by slashing sales taxes on electricity, gas and fuel, estimated to cost about 12 billion euros, and he has promised to renegotiate EU electricity market prices to better reflect France’s low costs of producing electricity, which relies mainly on nuclear reactors.
He also disputed claims that the National Coalition manifesto would cost 100 billion euros, adding that measures would be “spread out” over time depending on the fiscal and economic situation.
“Given the current fiscal situation, the next administration must have the principles of realism and responsibility,” Bardella said.
French Prime Minister Gabriel Attal held a news conference alongside the meeting, highlighting the intensifying political debate in the country and pointing to a warning issued earlier this week by another French business lobby, AFEP, which represents companies including LVMH and TotalEnergies SE.
“This warning must be taken seriously, as it comes from France’s largest business association, which rarely speaks out about the far right and the far left,” he said.
Returning to the campaign, the penultimate speaker was current Finance Minister Bruno Le Maire, who drew spontaneous applause from the audience but, if the opinion polls are correct, voters do not appear to be all that convinced.
“That’s my conclusion, and I hope that this isn’t the conclusion,” he said.
–With assistance from Alan Katz, Julien Ponthus, James Hirai, Ania Nussbaum, Michael Msika, Caroline Connan, and Gaspard Sebag.
Most read articles on Bloomberg Businessweek
©2024 Bloomberg LP
