France’s Marine Le Pen pledges to rein in public spending
Far-right presidential frontrunner wants to cap borrowing at 60% of GDP and reduce budget deficit, despite decades of failed attempts
French far-right leader Marine Le Pen has promised to drastically cut public spending and to cap future borrowing if elected president next spring, in a bid to bolster her economic credentials and calm jittery markets.
Le Pen, who is topping opinion polls ahead of her fourth bid for president, on Tuesday proposed a “golden rule” to cap national debt at 60 per cent of GDP and to reduce the public deficit each year by 0.5 per cent to reach “close to a balanced budget” — mirroring Germany’s “debt brake” which was enshrined in the constitution until last year. Le Pen said she would put the “golden rule” to voters in a referendum.
In a news conference, Le Pen blamed President Emmanuel Macron’s economic management and profligate spending for pushing the deficit to 5.4 per cent of GDP this year.
“The parties that are part of the system put us in the hands of debt holders but I refuse to lie to the French by saying this all will not have consequences,” she said.
She unveiled detailed plans of her €140bn package of spending cuts and tax rises she would implement over five years. The economic plans are designed to convince voters she can be entrusted with power and also to reassure investors who have sent French borrowing costs soaring.
Long a champion of big-state spending to protect the working class, Le Pen in recent months has swung behind the idea that France needs a major clean-up of its degraded public finances.
France has been singled out by markets as a weak link in the Eurozone because investors see the presidential election as a risk that may worsen chronic political gridlock and prolong profligate social welfare spending. French borrowing costs recently soared higher than Italy’s and Greece’s — in a reversal of fortunes since the Eurozone sovereign debt crisis in the early 2010s.
Macron’s bet that business-friendly reforms on labour and tax would deliver enough of a growth boost to solve France’s chronic deficits has not paid off. French governments have struggled for decades to rein in public spending, with the budget gap widening every year since 1974.