Marine Le Pen wants to save 140 billion euros - for example in EU contributions and benefits for foreigners. Economists doubt its feasibility. And it could also affect your own voters.
Marine Le Pen is planning a 140 billion euro austerity program, including a one-third cut in France's EU contribution and cuts in social benefits for non-French people.
Le Pen wants to reduce new debt to below three percent of gross domestic product by 2028 and to 2.2 percent by 2032.
Economists consider Le Pen's program to be unrealistic and "whitewashed", criticize savings targets of more than 80 billion euros and see constitutional hurdles in cuts for non-French people.
The planned cap on the EU contribution could burden French farmers, as France is the largest recipient of EU agricultural subsidies.
Paris. It's a foretaste of what Germany could expect if Marine Le Pen becomes president. In Brussels she announced that she wanted to cut France's EU contribution by a third. In the “Financial Times” she already called it a “test of strength”.
Criticism of the EU is part of Le Pen's political DNA. What is new is that the candidate from the right-wing national party Rassemblement National (RN) wants to put public finances back on a solid course with a 140 billion euro savings program in view of France's disastrous budget situation. There will be elections in France in six months.
Last week it presented its extensive economic program, and it goes far beyond France's contribution to the EU budget. She also wants to cut government services and social benefits for non-French people. Le Pen also wants to cancel aid to Ukraine.
But there are major doubts about its enforceability. Some of the measures could even be directed against their own voters.
Tuesday last week: With curves, charts and calculations, the Rassemblement National press conference is partly reminiscent of an economics lecture. When presenting her economic program, Le Pen wants to “send a clear signal that the undesirable development of public finances has come to an end.” The markets should also be able to view France as a reliable partner again, she says.
Le Pen appears confident. She is ahead in polls. Now she wants to signal: she can do business. She still has the image of having little knowledge of economics.
What remains particularly memorable in France is the television duel in 2017, in which she exposed herself when asked questions about her core issue at the time, the exit from the euro. Exiting the euro has long since been removed from the program in order to move the party more towards the political center.
Now comes budget discipline before the presidential elections. She wants to save 140 billion euros in five years. New debt should be below three percent of gross domestic product as early as 2028 and even 2.2 percent in 2032. That would significantly exceed the government's current austerity plans.
The core of Le Pen's plans is a debt brake that would limit national debt to 60 percent. The biggest savings item is a leaner administration: state agencies are to be dissolved and bureaucracy is to be reduced. There is talk of 220,000 public sector positions that will not be filled.
But the main levers are migration and the EU. Le Pen also relies on the “national priority” when it comes to the budget. Costs of 15 billion euros are to be eliminated through cuts in benefits for migrants and non-French people. In addition, there is a tax of 1,000 euros per year if a non-EU citizen is hired. “Foreign workers impose costs on society, so it is completely normal to consider a tax,” Le Pen said at a recent campaign appearance.
She wants to cap France's net contribution to the EU at five billion euros. In addition, there are 2.2 billion euros that are intended to give the country back a share of the tariffs collected by the EU.
It is becoming increasingly clear which EU wants it: entire policy areas such as diplomacy or internal security should be withdrawn from EU competences. The commission should lose power.
It has long been accused of being anti-business and anti-investment. She now wants to counteract this by relieving the burden on companies, but only partially. Large corporations and shareholders should pay more. The target is multinational corporations that “don’t pay their fair share” in France.
The fact that Le Pen put budget discipline on the agenda of the presidential election campaign was perceived positively. But economists in France are surprisingly unanimous in their assessment that the program is unrealistic and in parts simply “whitewashed”. Éric Dor from the IESEG University criticizes a mixture of “systematic overestimation of new income and savings”. New expenditure would also be underestimated.
Mathieu Plane from the OFCE research institute even considers the program to be a “sleight of hand”: “The actual expenditure intended to satisfy the electorate is offset by magic formulas that miraculously promise large amounts of income,” he told the newspaper Le Monde. More than 80 billion euros in savings can hardly be implemented.
Cutting benefits for non-French people, for example, would require a constitutional change. Economists also estimate the effect to be smaller than expected. The RN calculates that less immigration would lead to fewer security problems in the country. That would save two billion euros.
Capping the EU budget can only work if the other 26 countries follow suit. France cannot decide on them unilaterally.
However, the reduction in contributions to the EU could be directed against their own voters: France is the largest recipient of agricultural subsidies, with a share of more than 17 percent. If Paris cuts its contributions, there is also a risk of cuts in agricultural policy, which is important for farmers in France. Le Pen regularly tries to win her over to her side with election campaign appearances. French farmers are also known for their blockades and demonstrations.
According to economist Dor, the tax on non-European workers is also directed against his own voters. The Rassemblement National presents itself as an advocate for the rural population that is neglected by the state, but wants to use an additional levy to burden agriculture, which is dependent on this workforce.
Reactions in the economy have been muted. “There is good and not so good,” said Patrick Martin, chairman of the employers’ association Medef. Reducing certain taxes is a step in the right direction.
The levy of 1,000 euros for non-European workers is also causing trouble here. There is already a shortage of staff, especially in the construction and catering industries. The companies argue that the tax only increases labor costs, but does not change the origin of the employees. “A new tax will not produce a French chef or a bricklayer,” Marc Sanchez, general secretary of the small business association SDI, told the newspaper Les Echos.
The biggest question mark still remains the pension reform, which represents a large item in the budget. Le Pen had announced that he would continue to stick to a retirement age of 60 or 62, which is considered unaffordable, especially for companies. However, she doesn't want to present details until mid-November.
