Le Pen and Bardella Eye Power as France Faces Debt Crisis

François Bayrou, France’s prime minister, is staring down the barrel of likely defeat in an impending parliamentary no-confidence vote, set for next week. Waiting in the wings are Jordan Bardella and Marine Le Pen, right-wing populists from the National Rally, ready to tip Bayrou over the edge. Their party currently tops the opinion polls, fuelling hopes of forcing a snap election that could hand them control of France’s precarious public finances.

France’s fiscal outlook is dire: government debt hit 113 percent of GDP last year, with the trajectory still upwards due to a stubborn budget deficit of 5.8 percent of GDP. Xavier Ragot, president of the French Economic Observatory, sums up the consensus: “Almost all political parties, from the extreme right to the extreme left, recognise we have a problem with the public finances. Everybody recognises that we must do something.”

Yet, public spending in France has swollen to 57 percent of GDP, and the French people are saddled with the heaviest tax burden in the developed world, at 44 percent of GDP. Bayrou has proposed to freeze civil service salaries, close tax loopholes, trim social benefits and cut public holidays. Except for the Socialist Party, few others have presented detailed solutions to France’s fiscal malaise.

At a recent roundtable with business leaders hosted by the French employers’ association, Medef, Bardella set out National Rally’s economic credentials. “Too many standards, too many taxes, too many duties,” he complained, blaming excessive bureaucracy and years without supply-side reform. He argued for a state that sticks to its remit, freeing up space for innovators and risk-takers to thrive.

Bardella’s stance hints at a shift towards business-friendly territory for the National Rally, contrasting with its historic pitch to blue-collar voters. In last year’s parliamentary contest the party advocated for costly pledges such as cutting VAT on energy and indexing pensions to inflation, policies that would add €11bn and €27bn respectively to state outlays.

Le Pen herself continues to call the shots, outlining the party’s approach in a recent open letter to Bayrou. A headline proposal seeks to cap France’s annual payment to the European Union at €20bn, down from €23bn, an offer to cut costs without pursuing an exit from the bloc. The party suggests slashing funding for renewable energy by €8bn, reducing welfare for migrants by €18bn and seeking €60bn of savings through greater efficiency in the state bureaucracy. Questions remain as to the realism of these numbers, as sceptical economists warn the sums may not add up.

On tax policy, Le Pen is cautious, ruling out increases unless matched by reductions for the middle and working classes. The party has flirted with higher taxes on the wealthy and on corporate profit, but only if these create proportional benefits elsewhere and incentivise higher birth rates and economic growth.

Bardella also floated the vision of a sovereign wealth fund, with bonds issued to French citizens to crowdsource investment for key technologies, start-ups, the relocation of industry, and projects such as nuclear power. Shifting state borrowing away from international debt markets could insulate France from future market shocks, though the proposition is untested in France’s context.

Despite the rhetoric, experts doubt the National Rally is fully prepared to tackle the toughness of fiscal consolidation. Past opposition parties have made sweeping promises, only to temper them in power when confronted with the real numbers. Markets are watching for signs of competent stewardship, but for now, France lacks firm hands at the tiller.

The immediate future holds political drama. Should Bayrou fall, President Macron may attempt to assemble yet another minority government rather than face fresh elections. Stability remains elusive unless any party, perhaps even the National Rally, secures a clear parliamentary majority capable of commanding both legislative and financial confidence.