France faces a “Liz Truss-style scenario” if Marine Le Pen’s hard-Right National Rally (RN) triumphs at the snap election, Emmanuel Macron’s finance minister has warned.
Bruno Le Maire invoked the 2022 crunch in Britain’s debt markets to caution voters against backing Ms Le Pen’s party, which put in a strong showing during last week’s European parliamentary elections.
“A debt crisis is possible in France,” Mr Le Maire told local party officials on Tuesday, as first reported by the Financial Times. “A Liz Truss-style scenario is possible.”
Ms Truss’s mini-Budget, which relied on heavy borrowing to pay for sweeping tax cuts, was followed by a crisis in bond markets.
Ultimately, the Bank of England was forced to step in to stabilise the situation, which led to Ms Truss resigning after just 44 days as prime minister.
Since calling the snap election on Monday, Mr Macron has sought to sway voters by claiming the National Rally’s plans would increase government spending by €100bn (£84bn), threatening to push up borrowing costs for normal people.
In a speech on Wednesday, Mr Marcon said that reversing his pension reforms – which increased the retirement age from 62 to 64 – would “put the retirement system into bankruptcy”.
Ms Le Pen’s party, which won almost one-third of the votes in the European elections, gained popularity by promising to reverse the move. This has fuelled speculation of an expensive policy change if she were to gain power.
Mr Macron called on voters to oppose the parties on both the hard-Left and hard-Right in a bid to “build a joint project” for the country.
The French president said: “Things are simple today: we have unnatural alliances at both extremes, who quite agree on nothing except the jobs to be shared, and who will not be able to implement any programme.
“Look what’s happened since Monday – interest rates have gone up, the markets are panicking, European and international partners are worried.”
The French had expressed “anger”, he said, but were aware that RN’s policies and those of the hard-Left were totally unrealistic.
Credit ratings agency Fitch indicated there are serious economic risks from an RN victory.
The agency said: “RN has not presented a detailed fiscal programme, but has advocated tax cuts and a more progressive tax system. It has also called for protectionist measures to shield French firms from global competition.
“Political challenges may also hinder structural reforms that would support consolidation by boosting economic growth or even increase risks of policy reversals.
“The impact of some reforms is already being felt, such as ongoing measures to improve labour market participation rates, which have boosted employment growth.”
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