The French president, Emmanuel Macron, called a crisis meeting at the Elysée on Wednesday night, in which the heavyweights of the Government and the parties that support it in the National Assembly participated, to discuss the worrying situation of the public finances and the very dark prospects for the European elections on June 9.
The most pressing problem is the deficit, aggravated by lower than expected economic growth. Next Tuesday the figure for 2023 will be officially known. The deviation from the forecasts can be very important and affect the image of France and the solvency attributed by rating agencies such as Fitch, Moody’s and Standard
Undoubtedly aware of the trend, the head of Economy and Finance, Bruno Le Maire, announced a few days ago a drastic spending cut worth 10 billion euros, a way to attack the deficit and convince the markets that the The French government takes it seriously and there is a firm desire to save.
France was one of the most generous countries in aid during the pandemic and after the invasion of Ukraine. But the “whatever it costs” policy takes its toll on a country that was already heavily indebted and that, according to some of its partners in the EU, such as Germany, was living beyond its means. It seems that the time has come to act. Le Maire has even written a book, La voie française (The French Way), in which he outlines an austerity program for the coming years, perhaps the roadmap that he himself would want to apply if he is a candidate for the Elysée in 2027. Le Maire says that the French social model must be transformed and move from the “providential State to the protective State.” Beyond semantic nuances, that means fewer subsidies and less social spending.
“Debt, deficit, wind of panic at the top of the State,” was the headline yesterday on the front page of Le Figaro, whose editorial emphasized the gloomy tone regarding the deficit and the accumulated debt: “The slide from hell.”
Despite the difficulties, both Macron and Le Maire always take advantage of the good job creation data since they came to power in May 2017 and the attractiveness of France for foreign investors.
There is serious concern about the possibility of rating agencies lowering France’s rating. That would be an additional blow before the European elections, in which the Macronist coalition is at least ten percentage points behind the National Rally (RN, far right), Marine Le Pen’s party, according to all polls.
The extreme right benefits from the wear and tear of the president and his government, in addition to continuing structural consolidation in large segments of the electorate. His populist discourse, however, has limits and brings out contradictions. This week, the president of the RN and head of the list in the European elections, Jordan Bardella, has given two speeches before employers’ and businessmen’s associations that have raised doubts about the coherence and viability of proposals that aim to seduce businessmen but with proposals of expenses and taxation that do not add up.
