PARIS — Marine Le Pen’s far-right party is pledging to hold some of its costly measures for later in a bid to reassure jittery markets as the race to the French legislative elections heats up.
Following the triumph of the National Rally (RN) party in the EU election, French President Emmanuel Macron on Sunday called a shock national parliamentary election that will be held in two rounds on June 30 and July 7.
Since then, the prospect of having the far right in power has spooked markets, amid fears that its economic program would massively increase France’s already worrying debt figures. The RN’s calls for protectionist economic policies and proposals for higher public spending in a country already hit by significant levels of public debt have caused alarm.
French markets were hit by a brutal sell-off on Friday as political uncertainty hit bank stocks and the bond-market rout deepened.
Big gains for the far right in the French election could force Macron to govern with a hostile parliament in a cohabitation government, making it extremely challenging for his centrist administration to push its policy agenda and bring France’s public finances to a more sustainable footing.
But, over the past days, the National Rally has been rowing back on some of the party’s flagship measures.
“You need to be realist; I am the candidate of truth, and I don’t lie to the French,” the National Rally’s Jordan Bardella said on Friday in an interview with BFMTV, accusing the left-wing camp of making “Santa Claus” promises.
Earlier this week, Bardella hinted that the National Rally could backtrack on the idea to bring the retirement age to 60 for some categories of workers, and keep that measure for later. Over the course of the week, several RN heavyweights said that the party would not immediately implement all the economic measures listed in Le Pen’s 2022 presidential platform, which would potentially cost €101 billion a year, according to the Institut Montaigne think tank.
On Friday, Renaud Labaye, secretary-general of the National Rally group in France’s lower chamber and a former economy ministry official, reiterated that point and said that some of them, like the pensions reform, could be postponed to 2026.
But the National Rally is not giving up on everything. On Friday, Bardella confirmed that he would “immediately” lower the value added tax for fuel, electricity and gas.
“Together, these VAT rate cuts represent €24 billion in additional expenditure. This is exactly the equivalent of what we need to save in 2024 and what I have planned to save to balance our budget,” Finance Minister Bruno Le Maire said on Friday, taking into account also a VAT cut on food goods, previously proposed by the National Rally.
Almost every day this week, Le Maire has been warning against the RN’s program for the economy and has turned the specter of a major financial disaster into a major campaign argument. “They don’t give a damn about public money,” Le Maire told France Info on Friday.
The political crisis comes as France is cutting public spending this year and is planning to cut more in 2025 in a bid to reduce its massive debt level, which the government estimates at 5.1 percent of GDP in 2024. Next week, the European Commission is set to put France on a list of 11 EU countries that had an “excessive deficit” in 2023.
France’s top industry lobby Medef also expressed concerns on the National Rally economic program and it will audition party chiefs next week.
Meanwhile, Bardella, the RN candidate to become prime minister should the party win, said the current government put France “on the brink of bankruptcy,” and promised to launch an audit of France’s public spending, implicitly accusing the government of cheating on public accounts.