France’s new left-wing alliance unveils ambitious economic programme – and how they’ll pay for it

The left-wing New Popular Front coalition announced in a joint press conference Friday just how much its ambitious economic programme is going to cost – and how it’s going to fund it. But for a left fighting against decades of neoliberal economic orthodoxy, convincing voters that alternatives are possible could prove an uphill struggle.

By: Romain BRUNET
Jun 21, 2024

The bombardment has begun. “Unfunded gifts”, a “major risk” of “long-term stagnation” in the French economy, a “total delusion”, “dangerous” propositions. Whether coming from President Emmanuel Macron, Prime Minister Gabriel Attal, Finance Minister Bruno Le Maire, the Movement of the Enterprises of France (MEDEF) employers’ association or non-stop TV talking heads, a hefty part of France’s political and media landscape has been blasting the economic programme put forward by the left-wing New Popular Front (NFP) this week.

As programmes go, it’s ambitious. The NFP – a coalition of left-wing parties including Jean-Luc Mélenchon’s France Unbowed, the Socialist Party, the French Communist Party and the Greens – plans to raise the monthly minimum wage to €1,600, impose price ceilings on essential foods, electricity, gas and petrol, repeal Macron’s deeply unpopular decision to raise the retirement age to 64 and invest massively in the green transition and public services. Critics accuse the bloc’s policies of being costly, uncosted or even, to borrow Attal’s words at the launch of his own coalition’s programme launch Thursday, a “fiscal drubbing”.

“It’s a strategy designed to scare people,” France Unbowed’s Éric Coquerel, the former president of the National Assembly’s finance committee, said. “When the left has the capacity to govern the country, we lose count of the slanders levelled against us. It’s classic. It happened in 1981 [with Socialist François Mitterand’s victory] when people said that Russian tanks were going to roll into Paris. It happened in 1997 [with the victory of the ‘Plural Left’ in legislative elections and the cohabitation of right-wing President Jacques Chirac and Socialist Prime Minister Lionel Jospin], with very violent attacks from the MEDEF head at the time – and now it’s the same. We’re witnessing an accumulation of fake news and caricatures of what we’re proposing.”

The NFP has moved quickly to show the public that its numbers add up. During the bloc’s first three years in government, officials from the left-wing parties said in a joint press conference Friday, public revenues would rise first by €30 billion in 2024 – through a tax on companies’ super-profits and a restored wealth tax – to an increase of €100 billion in 2025 and €150 billion in 2026.

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This increase in revenue through taxation, they said, would cover the cost of the substantial increase in government spending the coalition was proposing – some €150 billion by 2026-2027. They stressed the programme would not increase France’s deficit – though it wouldn’t reduce it, either.

By proposing a complete break with Macron’s programme, the NFP is launching a direct assault on the established economic order. And not just in France – for four decades, neoliberal economic orthodoxy has reigned across much of the Western world.

The idea that policies that promote limited public spending, government support for businesses, flexible labour markets and unrestrained competition would be serious, while policies aiming to raise public spending and salaries and invest in public services would be utopian has little by little anchored itself in the public imagination. It’s an ideological victory perhaps best summed up by the famous tirade of former British prime minister Margaret Thatcher: “There is no alternative.”

“That’s the difficulty,” said Coquerel, who met with MEDEF alongside Socialist Boris Vallaud on June 20. “For decades now, the ideological steamroller has worked on people’s minds. Sometimes we even have to convince people who have every interest in seeing our programme succeed that what we’re proposing is possible.”

Taking money from those who can afford it

By contrast, the pro-business parties that make up Macron’s ruling coalition, or those that have formed government in the past such as the conservative Les Républicains, are vocal in describing themselves as “rational” – unlike their “irrational” opponents pushing for economic alternatives.

“France’s fiscal room to manoeuvre is non-existent,” Macron’s finance minister said during Thursday’s MEDEF meeting, describing the policies proposed by the NFP and the far-right National Rally (RN) as “delusional programmes out of step with the state of public finances”.

“At a certain point, it’s time to save and restore the balance sheet, as we’ve started to do,” he said.

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But while the RN isn’t explaining how it plans to fund its programme, the NFP has been very clear.

“We’re making sure to finance the whole of this ambitious project by taking money from the pockets of those who have the means to give it,” Socialist Party first secretary Olivier Faure said on Friday, June 14, calling for a “civic rearmament” from “everyone who can contribute”.

The left-wing alliance has promised a finance bill this summer that would overhaul the tax system by increasing the number of income tax brackets from five to 14 and replacing France’s flat social security contributions with a progressive system. The group also intends to restore the wealth tax abolished by Macron, close a number of tax loopholes and introduce a maximum inheritance.

“The New Popular Front’s programme outlines perspectives for new ways of doing things,” economist Michael Zemmour explained Tuesday on France Info. “They are notably emphasising the taxation of very high inheritances, which is something that has not yet been done in France and is part of a world-wide dynamic.”

In any case, these proposals have not managed to convince many across the political and media landscape. Many commentators continue to cite the finance ministry estimations released on June 14, which put the cost of the NFP’s programme at some €286 billion a year – a figure the NFP rejects.

“Obviously the balance isn’t there,” BFMTV commentator Nicolas Doze said a few days after the figure was released.

‘Strange how we’re asked for so many details, and others aren’t’

This is where the second challenge facing the NFP comes in: having to cost out in detail every policy. It’s a long and fastidious exercise in a rapidly moving two-week campaign – and one that leaves plenty of room for blunders.

Before the definitive costing had taken place, Socialist Valérie Rabault told Les Échos daily on Tuesday that the left’s common programme would cost €106 billion over three years.

A few hours after the interview was published, France Unbowed released a statement saying that Rabault’s estimate “didn’t correspond to the NFP’s costing” that “would be presented in the coming days in a joint press conference”.

“The way we’re treated isn’t fair,” Coquerel said. “It’s still strange that we’re asked for so many details and others aren’t, even if I understand that we’re asked to give them because we’re the only ones who are putting forward a new framework.”

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The NFP’s policies raise legitimate questions. How will small and medium enterprises manage to pay their employees a minimum wage of €1,600 a month? How can France avoid a possible inflation spiral linked to rising salaries? And more than anything else, how can the bloc be sure that all the different economic actors will accept such measures without the slightest resistance?

But their opponents’ programmes raise their share of questions too. The RN, which talks about increasing public spending without increasing government revenues, continues to backtrack on certain of its key measures – such as lowering the retirement age and reducing the value-added tax. A little over a week away from the first round of the election, the far-right party still hasn’t presented its full political programme.

And Macron’s presidential coalition has been publicly punished twice in the past few months for budget mismanagement. The European Commission announced on Wednesday the forthcoming opening of an excessive deficit procedure against France, saying the government’s deficit levels violated the EU’s rules. At the end of May, US-based credit rating agency Standard and Poor’s downgraded France’s credit score from AA to AA-, citing what it described as the country’s “deteriorating budget position”.

This article has been adapted from the original in French.

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