One of the messages that helped propel the far-right National Rally party to the brink of power in France’s parliamentary election on Sunday — a previously unthinkable turnaround — is a common refrain in American politics: “It’s the economy, stupid.”
Both the National Rally and a coalition of left-wing parties called the New Popular Front made big gains in part by tapping into anger over the cost-of-living crisis and a sense that President Emmanuel Macron had become out of touch with reality and didn’t understand their struggles. Voting takes place in two rounds, with candidates who met certain thresholds moving on to the next round on Sunday.
A two-year spell of high inflation has left low- and middle-income French families struggling to pay for basic services such as energy, gas and food, while wages have, in some cases, failed to keep pace. Polls show that concerns about “purchasing power” were a top voter concern, along with immigration and security. Blue-collar workers turned out in droves to vote for the National Rally, which promises to help households and curb immigration. The New Popular Front came in second with promises to raise wages and lower the retirement age.
It is unclear how each party will pay for the pledges. Economists say many of the funding proposals are not credible, raising risks for a heavily indebted France. But the final results are hard to predict: if France ends up with a hung parliament in next Sunday’s vote, the legislative deadlock could also spook investors.
What are the economic plans for the National Rally?
As part of an economic policy prioritising the “France First” principle, the National Rally would reserve preferential rights to certain jobs and social benefits for French citizens. In a gesture of respect for the working classes, people who started working before the age of 20 would be able to retire at 60 instead of 64, the country’s official retirement age. Pensions would be indexed to inflation, but making such changes would require amending the Constitution.
By foregrounding economic problems, Jordan Bardella, the party president and Marine Le Pen’s protégé, has attempted to normalise his party’s nationalist and anti-immigrant policy line, which has long been taboo. But the core of its platform links immigration to economic uncertainty.
“He talks about improving the purchasing power of the French,” says Lisa Thomas-Darbois, deputy director of research at the Institut Montaigne, an economic think tank in Paris. “In reality, the party’s promises of prosperity are based on fighting immigration, linking immigration to jobs and crime and expelling illegal immigrants.”
One of Bardella’s biggest draws is his promise to put more money into voters’ pockets by cutting taxes on electricity, power and gas from 20 percent to 5 percent. Vowing to be the “prime minister of purchasing power,” he would encourage businesses to raise wages by 10 percent for people earning less than 5,000 euros a month (about $5,350) with no additional taxes for employers.
In his victory speech Sunday night, Bardella blamed Macron for high inflation and rising national debt and deficits — a legacy of Macron’s efforts to stabilize the economy during pandemic lockdowns and an energy crisis. Bardella claimed he would be fiscally responsible and promised to “restore order” to France’s finances (the European Union recently reprimanded France for violating the bloc’s fiscal rules).
How would the party finance its programme?
The National Rally’s programme does not include specific budget figures, but Bardella has said it can save billions of euros a year by reducing immigration and cutting welfare payments for foreign nationals. Part of those savings involves denying undocumented people access to free medical treatment except in cases of emergency.
Bardella would also cut 2 billion euros from France’s annual payments to the European Union (a requirement for countries that are members of the bloc). He said he could save at least 65 billion euros more by fighting tax evasion and social security fraud, and would order an audit of France’s finances to find billions of euros of extra “unnecessary” spending that could be redirected to improve the lot of middle- and low-income people.
Is it realistic?
Not necessarily. According to an assessment by the Institut Montaigne, such promises would cost almost 38 billion euros a year. For example, excluding immigrants from the health system would save only 700 million euros a year, but cutting energy taxes would cost more than 11 billion euros, while indexing pensions to inflation would cost 27 billion euros.
In recent days, Bardella has backtracked on some of the more expensive ideas (such as eliminating income taxes for workers under 30) after some estimates put the cost of the entire National Rally programme at around 100 billion euros.
He also moved closer to Macron’s economic platform in a bid to woo centrist voters, promising to turn France, already Europe’s largest supplier of nuclear energy, into a “paradise” for nuclear power. He promised lower taxes on industry output and said he would review the European Central Bank’s mandate to focus on jobs rather than inflation.
How different is the New Popular Front’s economic plan?
The left-wing coalition is pushing a tax-the-rich and wealth-sharing agenda inspired by the far-left party France Unbreakable. By implementing a Keynesian spending program and raising wages, the reasoning goes, the government can get consumers to start spending more and thus boost the broader economy.
The key point of the proposal is to increase the monthly minimum wage net of taxes from 1,398 to 1,600 euros. The New Popular Front would also freeze prices for food, energy and fuel. The state would pay for all expenses associated with their children’s education, including meals in cafeterias, transport and extracurricular activities.
France’s official retirement age, which Macron raised by decree last year to 64, sparking nationwide protests, would be lowered to 60. On immigration, undocumented workers would be granted legal status under certain conditions in sectors with labor shortages.
How would the whole party pay for it?
The programme is estimated to cost between €125bn and €187bn a year, and the New Popular Front has said it could raise €150bn by taxing wealthy individuals.
That includes reinstating a wealth tax that Macron had abolished, raising inheritance tax and imposing an exit tax on wealthy people who move their tax residency abroad. The party would create 14 new tax brackets, with higher rates for income above a certain level, the highest being 90 percent.
French companies would also see a new tax applied to above-average profits, while a variety of corporate tax breaks and credits would be eliminated.
Is it realistic?
Some say the program is outrageously expensive and risks pushing French finances to the brink, spooking international investors who have recently raised France’s borrowing costs, not to mention multinational companies that had been attracted by Macron’s pro-business policies.
“France’s financial situation is already a mess,” said Nicole Bacharan, a political scientist who teaches at Sciences Po University in Paris. “This will make things worse.”
Others, including French economist Thomas Piketty, say the need to invest in health, training, research and infrastructure will require significant resources. “And that means taxing the richest,” he said in an interview with La Tribune newspaper.
When energy prices soared after Russia’s invasion of Ukraine, Macron’s government worked to limit electricity bills and rising food prices by negotiating with producers.
“But people think prices stayed high anyway, so it didn’t get much credit,” said Eric Heyer, chief economist at the French Economic Observatory.
During the election campaign, Macron’s Prime Minister Gabriel Attal has pledged to help with the cost of living again, but he has largely stuck to fiscal conservatism and promised not to raise taxes.
The party would cut electricity bills by 15 percent from February, extend the so-called Macron bonus that encourages companies to pay workers up to 10,000 euros a year without additional employer taxes, and increase social benefits for the poorest households by around 5 billion euros a year.
How would your Renaissance party finance its programme?
Of all the parties, it is the one that costs the least, at around 17.6 billion euros a year, according to estimates by the Institut Montaigne. Before the snap election, the government was aiming to cut spending by up to 20 billion euros to curb debt and deficits, so keeping new spending low remains a priority.
What happens next?
If Bardella’s party wins enough seats in parliament, he could become prime minister, appoint cabinet members and derail much of Macron’s domestic agenda. But if France ends up with a hung parliament in which neither the far right nor the united left have a majority, creating legislative gridlock, economists warn there could be a debt crisis if a paralyzed government is unable to control France’s finances.
