The dénouement to the latest political drama gripping France could hardly have come at a worse time. The EU needs decisive political leadership. France’s budget woes also threaten financial stability. And there is no easy way out.
Sebastien Lecornu, who has just achieved the unenviable distinction of being France’s shortest serving prime minister, is working on a plan that may pave the way for a compromise budget to be introduced before December 31st. It would see a combination of the Socialists, Greens and Communists form a government until the next presidential election, scheduled for June 2027.
If it comes to pass, it will be a reprieve for Emmanuel Macron, the beleaguered French president, but in reality it is unlikely to be anything more than a sticking plaster solution.
A Socialist-led government may bring temporary political stability, but it will not address the country’s perilous economic position. It is rumoured that Macron’s proposed reforms to the unsustainable pension system will be ditched. Unless radical reforms are introduced, France is heading towards a fiscal reckoning. The numbers are stark. The budget deficit is over 5 per cent of GDP and rising, while the national debt – roughly €3.3 trillion – amounts to 114 per cent of GDP.
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The biggest beneficiary of this polycrisis is Marine Le Pen. Her Rassemblement National (RN) party is deemed far-right primarily because of its hardline stance on immigration and its past association with fascist movements. But its economic agenda is overwhelmingly populist and offers no answers to the budget crisis. Even though RN no longer pledges to exit the EU, it remains Eurosceptic. If it forms the next government it will become hugely problematic for EU governance and cohesion.
The president – and other parties so far unwilling to compromise – must all take some of the blame for this crisis. A compromise budget may only buy time, while an election is unlikely to lead to a new administration with the power to tackle the budget crisis in an effective way.
