PARIS — France’s far-right National Rally on Wednesday rejected the idea that a government collapse would lead to a Greek-style financial crisis or to a U.S.-style shutdown, scenarios that have investors worried that political chaos in France could precipitate a eurozone-wide disaster.
Speaking to reporters on Wednesday, National Rally heavyweight Jean-Philippe Tanguy accused French Prime Minister Michel Barnier of “crying wolf” after he went on national television Tuesday evening to warn of “serious turbulence on the financial markets” that could follow a government collapse.
“Being unable to ensure tax reforms based on justice and fair contributions for all, Mr. Barnier is forced to brandish panic [and] the fear of chaos,” replied Tanguy.
Tanguy said that were the government to collapse, it will still be able to introduce stopgap measures to ensure that the administration keeps functioning.
“We commit to vote in favor of that law,” Tanguy promised.
The financial markets, however, do not appear assuaged. Wednesday saw the interest rate on France’s benchmark 10-year government bond come within a mere one-hundredth of a point to its Greek counterpart. Additionally, the premium investors are demanding over the comparable German bond is now higher than at any time since the depths of the eurozone sovereign debt crisis in 2012, at 0.87 percentage points.
Barnier and the National Rally are at odds over the conservative grandee’s budget plans for 2025, which includes €60 billion in savings aimed at reducing the French deficit. The deficit is projected to come in at 6.1 percent of gross domestic product for 2024, more than double the European Union limit for overspending.
Since his appointment in early September, Barnier has made it clear that bringing down the deficit would be his key priority — a promise that has calmed those in Brussels worried about France’s overspending since the pandemic. The European Commission on Tuesday endorsed Barnier’s plan to get France’s finances in order.
Lawmakers have been debating Barnier’s budget for weeks, but with the end of the year nearing it has become increasingly clear that the prime minister will need to use a constitutional backdoor to pass it. The maneuver allows him to enact legislation without a vote — but in turn allows lawmakers to put forward motions of no confidence. An alliance of pan-left lawmakers has already announced to bring one forward.
The National Rally has, until recently offered tacit support to Barnier’s minority government, which is backed by a conservatives and centrists in a messy marriage of convenience. But party leader Marine Le Pen on Monday threatened to join the left’s effort to oust him over several demands related to the budget — including scrapping an electricity tax hike and a proposal delay to the inflation adjustment for pensions. Le Pen also wants to see the spending cuts on medical aid for migrants.
“Simple discussions are better than nothing, but they won’t be enough,” Le Pen wrote in a cryptic post on X on Tuesday morning.
Speaking later in the day, Tanguy, who is in charge of economic files for the National Rally, said the party does not “take lightly” its decision to back a no-confidence measure against Barnier — while maintaining his depiction of the PM as the intransigent party.
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