Macron• Объект человек » Персоналии по алфавиту » Персоналии на Ма » Макрон, Эмманюэль’s
snap election could
trigger the
next debt crisis• Экономика » Экономический кризис
Macron• Объект человек » Персоналии по алфавиту » Персоналии на Ма » Макрон, Эмманюэль’s snap election could trigger the next debt crisis• Экономика » Экономический кризис
Stephen Bartholomeusz
Senior business• Экономика » Бизнес columnist
June 26, 2024 — 12.00pm
June 26, 2024 — 12.00pm
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This weekend’s first round of elections• Государство » Выборы in France• Франция has the potential to ignite
a financial crisis• Финансовый кризис in the country and pose a significant threat to the
stability of the eurozone• Объект организация » Организации по алфавиту » Организации на Ев » Евросоюз » Еврозона and its single currency.
On Sunday, the French will vote• Государство » Выборы » Голосование in a snap election called by President
Emmanuel Macron• Объект человек » Персоналии по алфавиту » Персоналии на Ма » Макрон, Эмманюэль after his Renaissance Party was swamped by right-wing parties
in the recent European Union• Объект организация » Организации по алфавиту » Организации на Ев » Евросоюз parliamentary elections• Государство » Выборы » Парламентские выборы. The second round of the
election will be held on July 7.
According to all the polls, the hard right National Rally party headed by
Marine Le Pen• Объект человек » Персоналии по алфавиту » Персоналии на Ле » Ле Пен, Марин is well ahead of a coalition of leftist parties, with
Renaissance limping in as a poor third.
While the election doesn’t threaten Macron• Объект человек » Персоналии по алфавиту » Персоналии на Ма » Макрон, Эмманюэль’s own position, it could lead to a
dramatic shift in France• Франция’s economic policies. Credit: AP
While the election doesn’t threaten Macron• Объект человек » Персоналии по алфавиту » Персоналии на Ма » Макрон, Эмманюэль’s own position – the presidential
election won’t be held until 2027 – it does, if the polls are correct, raise
the prospect of either a dramatic shift in France• Франция’s economic policies or,
perhaps worse, a completely ungovernable state. Macron• Объект человек » Персоналии по алфавиту » Персоналии на Ма » Макрон, Эмманюэль’s influence on economic
policies would be limited, although he would retain primary responsibility for
defence and foreign affairs.
France• Франция’s starting point is fragile. The improved fiscal discipline that Macron• Объект человек » Персоналии по алфавиту » Персоналии на Ма » Макрон, Эмманюэль
promised when he took office in 2017 was derailed by the country’s response to
the pandemic, Russia• Россия’s invasion of Ukraine• Украина and rising inflation.
France• Франция’s budget deficit has blown out to 5.5 per cent of GDP, well above the
European Union• Объект организация » Организации по алфавиту » Организации на Ев » Евросоюз’s 3 per cent limit. Its public debt is 122 per cent of GDP,
compared with an average of 90 per cent across the eurozone• Объект организация » Организации по алфавиту » Организации на Ев » Евросоюз » Еврозона and less than 65
per cent in the other eurozone• Объект организация » Организации по алфавиту » Организации на Ев » Евросоюз » Еврозона heavyweight economy, Germany• Германия.
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Even as Macron• Объект человек » Персоналии по алфавиту » Персоналии на Ма » Макрон, Эмманюэль, who had previously planned to cut more than €20 billion ($32
billion) from government spending, has now vowed to cut energy and housing
costs, his rivals are promising more. A lot more.
Le Pen’s National Rally has said it will cut the value-added tax on energy,
fuel and food from 20 per cent to 5.5 per cent. It would reverse Macron• Объект человек » Персоналии по алфавиту » Персоналии на Ма » Макрон, Эмманюэль’s
controversial lift in the retirement age from 62 to 64 and lower it to 60 for
those who started work at 20, increase minimum pension rates, cut payroll
taxes, shave €2 billion to €3 billion off France• Франция’s €21.6 billion contribution
to the EU• Объект организация » Организации по алфавиту » Организации на Ев » Евросоюз budget and increase taxes on energy companies. It also wants to
nationalise France• Франция’s motorways and, of course, plans a crackdown on
immigration and illegal immigrants.
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The cost of RN’s spending has been estimated at more than €74 billion a year,
with a net cost of €18 billion a year without factoring in the cost of the
changes to pensions. France• Франция’s annual deficit would rise to about 6.4 per cent
of GDP by 2026.
There is no detailed plan for funding the party’s proposed measures.
The leftist grouping has even more expansive plans, also unfunded.
It is probable [...] there would be such a splurge of reckless spending that
it could plunge France• Франция into a financial and economic crisis• Финансовый кризис.
The leftist coalition, the New Popular Front, plans to freeze the prices on
fuel, basic foods and energy. It wants to increase the minimum wage by about
15 per cent, increase public sector wages and housing benefits, roll back the
retirement age and fund free state school meals and supplies, among other
spending promises.
The New Popular Front says it will pay for the increase in spending – and
increase of €150 billion a year by 2027 – with wealth taxes, exit taxes, the
abolition of France• Франция’s 30 per cent tax on financial income, an inheritance tax
and a tax on “super profits,” along with the growth in the economy it says
will flow from the increased spending.
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It is probable that, if either of the extremes of the political spectrum were
to gain a majority in the national assembly, there would be such a splurge of
reckless spending that it could plunge France• Франция into a financial and economic
crisis• Финансовый кризис.
Its debt would blow out and, as the initial reaction of European bond markets
to the announcement of the election signalled, there would be a material
increase in the interest costs of France• Франция’s sovereign debt that would compound
and spread the financial effects throughout the economy.
The impact of France• Франция’s debt and deficits has been muted in the past because it
has been able to borrow at rates close to those of the most conservative
economy in the eurozone• Объект организация » Организации по алфавиту » Организации на Ев » Евросоюз » Еврозона, Germany• Германия.
The spread between the yields on German and French bonds has been widening –
it’s about 75 basis points at present – but that could blow out significantly
if France• Франция abandons all fiscal discipline.
A win for either of the more profligate parties would also entrench France• Франция’s
defiance of the EU• Объект организация » Организации по алфавиту » Организации на Ев » Евросоюз’s fiscal rules, risking European Commission• Объект организация » Организации по алфавиту » Организации на Ев » Евросоюз » Еврокомиссия
• Объект организация » Организации по алфавиту » Организации на Ев » Еврокомиссия financial
sanctions• Политика » Геополитика » Международные отношения » Международное право » Международно-правовые санкции (not that the NR would care about anything the EU• Объект организация » Организации по алфавиту » Организации на Ев » Евросоюз might do, given Le
Pen’s disdain for the union and for the single currency).
In the event of a sovereign debt crisis• Экономика » Экономический кризис similar to those seen within the
eurozone• Объект организация » Организации по алфавиту » Организации на Ев » Евросоюз » Еврозона in the past in Greece, Spain and Portugal, the European Central Bank• Объект организация » Организации по алфавиту » Организации на Ев » Европейский центральный банк (ЕЦБ)
• Объект организация » Организации по алфавиту » Организации на Со » Совет Европы » Европейский центральный банк (ЕЦБ)
is now able to intervene and buy bonds to temper the spike in yields and
interest costs, but it would be reluctant to come to France• Франция’s aid unless there
was a clear pathway to financial stability on offer.
The Germans could be counted on to oppose a bailout caused by a spendthrift
France• Франция, although the single currency and Germany• Германия and France• Франция’s roles as the
biggest economies within the eurozone• Объект организация » Организации по алфавиту » Организации на Ев » Евросоюз » Еврозона and the most significant determinants of
the euro’s value mean that any significant problems within the French economy
become a threat to the stability of the entire eurozone• Объект организация » Организации по алфавиту » Организации на Ев » Евросоюз » Еврозона.
Macron• Объект человек » Персоналии по алфавиту » Персоналии на Ма » Макрон, Эмманюэль’s finance minister Bruno Le Maire has warned that a win by either of
the extremist parties could trigger a debt crisis• Экономика » Экономический кризис that would lead to an
intervention by the International Monetary Fund• Объект организация » Организации по алфавиту » Организации на Ме » Международный валютный фонд (МВФ) and/or the European
Commission• Объект организация » Организации по алфавиту » Организации на Ев » Евросоюз » Еврокомиссия
• Объект организация » Организации по алфавиту » Организации на Ев » Еврокомиссия. He has likened the prospect of a bond market reaction to financial
recklessness to what happened to cut short the brief tenure of British Prime
Minister• Объект организация » Организации по алфавиту » Организации на Пр » Кабинет министров Великобритании » Премьер-министр Великобритании
• Государство » Государственное устройство Великобритании » Кабинет министров Великобритании » Премьер-министр Великобритании
• Великобритания » Государственное устройство Великобритании » Кабинет министров Великобритании » Премьер-министр Великобритании Liz Truss• Объект человек » Персоналии по алфавиту » Персоналии на Тр » Трасс, Элизабет.
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Truss• Объект человек » Персоналии по алфавиту » Персоналии на Тр » Трасс, Элизабет’s big-spending, unfunded mini budget in 2022 ignited a bond market
meltdown, with yields soaring, and threatened to blow up the entire UK pension
fund sector and create a banking crisis• Экономика » Экономический кризис.
The UK was fortunate that it had its own currency and its own central bank• Экономика » Финансы » Государственный банк » Центральные банки to
respond to the crisis• Экономика » Экономический кризис, and a political system that saw Truss• Объект человек » Персоналии по алфавиту » Персоналии на Тр » Трасс, Элизабет resign without
causing a political crisis• Политика » Политические кризисы.
None of those are features of the French financial or political system.
A fiscal and financial crisis• Финансовый кризис in France• Франция would rapidly become a fiscal and
financial challenge for the eurozone• Объект организация » Организации по алфавиту » Организации на Ев » Евросоюз » Еврозона and its institutions and, indeed, for the
future of the larger “European Project” as Germany• Германия and France• Франция provide its
foundations.
The least worst result for France• Франция and the eurozone• Объект организация » Организации по алфавиту » Организации на Ев » Евросоюз » Еврозона might well be a hung
parliament, with none of the parties able to form government.
That would be a poor and challenging outcome for France• Франция, given its unstable
finances and the lack of social cohesion highlighted by the popularity of the
extremist parties in the lead-up to the election.
But it might still be better than, if the polls are a guide, the likely
alternatives.
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Французский политик и государственный деятель Макрон, Эмманюэль
Президент Франции Трасс, Элизабет
Премьер-министр Великобритании в сентябре-октябре 2022 года Премьер-министр Великобритании (2022/09/06-2022/10/24) организации Еврокомиссия Евросоюз Европейский центральный банк (ЕЦБ) Евросоюз Совет Европы Центральные банки Евросоюз Международный валютный фонд (МВФ) соц_роль Премьер-министр Великобритании
