PARIS — Jean-Luc Mélenchon pointed to Spanish Prime Minister Pedro Sánchez as proof that greater public spending can boost the French economy and repair its strained public finances.
“Ever since Spain adopted a budget focused on ecological and social growth, it has experienced steady growth and a decline in its debt,” said Mélenchon, the leading left-wing candidate for next year’s presidential election in France.
In a press conference focused on the budget on Wednesday, the 75-year-old radical doubled down on his calls for a positive demand shock driven by billions in new state spending. He also reiterated his proposal to write off billions of euros in French debt held by the European Central Bank, which has drawn strong criticism, including from ECB President Christine Lagarde.
Polls show Mélenchon neck and neck with center-right candidate Édouard Philippe in the race to qualify for a second-round runoff against Marine Le Pen, the far-right frontrunner who presented her own budget plans last week.
Under Socialist Prime Minister Pedro Sánchez, Spain has significantly reduced its budget deficit, while public debt is projected to fall below 100% of GDP in 2026. His government has raised the minimum wage and supported investment in green energy, alongside other sectors. Although inflation is a major concern and economic growth is expected to moderate in 2027, Spain remains one of Europe’s fastest-growing major economies, with the IMF on Tuesday forecasting 2.5% growth in 2026.
Spanish deficit fell significantly under Sánchez, and became one of the Eurozone’s fastest-growing economies after the pandemic.
Spain’s debt-to-GDP ratio dropped below 100% — while France’s raised to 119% — as the government invested heavily in sectors such as green energy and raised the minimum wage. But the cost of living remains a major concern in the country, particularly housing — one of the issues that led Sánchez to call a snap election earlier this month.
More money, less problems?
Mélenchon wants to boost growth by increasing purchasing power through higher salaries — including a higher minimum wage, a 10% raise for public-sector workers and a nationwide round of collective bargaining — as well as higher benefits for welfare recipients and a monthly payment of €1,337 for every French student intended to lift them above the poverty line.
Together, these measures form what his campaign calls an €82 billion “emergency spending” package.
Eric Coquerel, a Mélenchon ally who heads the French National Assembly’s powerful finance committee, argued in the same press conference that the new spending would drive GDP growth and increase tax revenue.
He also outlined ways to fund it, including a 2% wealth tax on households worth more than €100 million, popularized by French economist Gabriel Zucman, and higher taxes on large inheritances, which would be capped at €12 million under a Mélenchon presidency.
Fiscally conservative think tanks such as Institut Montaigne have argued that Mélenchon significantly underestimated the cost of his proposed spending and the potential tax revenue in previous campaigns. Critics also warn of capital flight if he is elected president, as occurred after his political mentor François Mitterrand was elected in 1981 on a platform of mass nationalizations.
Mélenchon blamed the current state of France’s finances on President Emmanuel Macron’s decision to cut several taxes early in his presidency, a move Macron said was intended to attract more investment.
“There are no other causes [of the deficit] than the systematic depletion of the state orchestrated by Macronism,” Mélenchon said.
“We are pitting the virtuous cycle of ecological and social recovery… against the vicious cycle of Macronist budgets and the dismantling of the state,” he added.
Prime Minister Sébastien Lecornu’s government has presented a budget with €43 billion in spending cuts, aiming to reduce France’s deficit to 5% of GDP without raising taxes. This year’s deficit is expected to reach 5.4% of GDP, missing the initial 5% target.
The counter-proposal from Mélenchon’s France Unbowed includes €106.4 billion in additional revenue and €81.7 billion in further spending, according to Coquerel, leaving about €25 billion to reduce the deficit.
France’s current center-right government is expected to pass its budget through the country’s hung parliament either by invoking a constitutional mechanism that allows the executive to pass legislation without a vote or by executive order. Mélenchon said his first order of business if elected in May would be to draft a new budget, which he hopes to pass in summer 2027.
France Unbowed advocates for a reduction of France’s contribution to the European Union, which presidential frontrunner Le Pen also wants to cut by €11 billion, though Coquerel clarified that he had not included a potential rebate in his economic forecasts.
Mélenchon intends to use the contribution as leverage to push for revised EU treaties, including scrapping the 3% deficit target for member countries and allowing national governments to adopt protectionist policies.
Critics, including Lagarde, said Mélenchon’s debt proposal was “dangerous” and potentially illegal because it could amount to direct financing of member countries by the ECB, which is prohibited by European treaties.
