French president Emmanuel Macron speaks to the French delegation as he attends the 47th WorldSkills Competition, where young competitors from all over the world showcase their professional skills, in Lyon on September 10, 2024. (Photo by Laurent Cipriani/ POOL/ AFP)
PARIS: Marine Le Pen’s party unveiled its economic programme that includes tax cuts for corporations and measures to favour French citizens, an agenda that could complicate Prime Minister Michel Barnier’s attempt to form a government and adopt a budget by next month.
In a written programme presented to lawmakers last Saturday, the far-right National Rally said it is seeking to reduce corporate taxes, cancel income tax for young people under 30, tax financial assets to redirect funds to families, grant preference to French nationals in public tender offers and favour citizens in job recruitment and social housing.
The party also wants to enforce stricter screening of foreign investments, reform European Central Bank rules and limit French electricity prices by exiting the European energy market.
Barnier, appointed this month, is expected to put a new government into place in the coming week.
But the new prime minister will have to walk a tightrope in trying to satisfy enough lawmakers across the political spectrum to avoid a no-confidence motion, after the snap election created a hung parliament with no group able to form a legislative majority.
The most pressing task awaiting Barnier will be to pass the 2025 budget bill.
President Emmanuel Macron’s surprise decision to call elections in June triggered turmoil in the bond markets, driving up France’s borrowing costs relative to other European countries as investors fretted about the impact on public finances.
Recent assessments by the France’s treasury indicate that the country’s economic situation worsened during the two months Macron hesitated over choosing a new prime minister.
Compounding the pressure, the European Union (EU) has put France in a so-called excessive deficit procedure to enforce stricter fiscal discipline.
Barnier, a 73-year-old former Brexit negotiator for the EU, has stressed the importance of curbing debt, but he has yet to outline a detailed plan and lacks clear parliamentary support.
The French parliament is now divided into three major blocs – Le Pen’s National Rally, Macron’s centrist group, and the left-wing coalition that includes the Socialists and Jean-Luc Melenchon’s France Unbowed.
Macron has opted to collaborate with the right, tasking Barnier, a traditional conservative from the Republicans, to form working majorities on key issues – potentially with the implicit backing of Le Pen.
Macron had consulted Le Pen by phone before naming Barnier, according to a person familiar with the far right leader’s thinking. During their conversation, Le Pen said she wouldn’t immediately oppose the new prime minister by supporting a no-confidence vote, though her party is likely to reject the upcoming budget, the person said, asking not to be identified as the discussions were private.
That could leave Barnier’s government resorting to a constitutional measure known as 49.3 to bypass parliamentary approval.
Then, Le Pen could still join forces with the left in a no-confidence vote that could bring down the government.
Le Pen’s clout over Barnier’s government is ironic given Macron had rose to power presenting himself as an antidote to the far right.
In a bid to protect his legacy and make France a country that’s more welcoming to international investors and businesses, the president is now entangled with the demands of Le Pen’s party.
The National Rally’s economic agenda could also impact Barnier’s choice of a finance minister.
Bruno Le Maire, Macron’s outgoing finance minister, said he would leave government for a career in academia.
The far-right party plans to use a parliamentary window on Oct 31 to seek to abolish Macron’s unpopular pension reform.
While the push is likely to fail, it could divide the left, which has been wary of supporting any proposals from the far-right group.
In the past, the National Rally has advocated for France to leave the eurozone and adopt other protectionist policies, but it has since dropped some of those ideas to broaden its appeal. — Bloomberg
