Economic policy has taken something of a back seat in a French presidential campaign initially focused on cultural and identity issues, then overshadowed by the war in Ukraine. But as the country prepares for the April 10 first round, the various candidates are offering different visions of France’s economic future.
The French economy performed better than expected after the calamitous effects of the Covid crisis, with 7 percent growth in 2021 – higher than Germany, Italy and Spain. Unemployment sank to 7.4 percent in the fourth quarter of 2021, its lowest rate since 2008.
But despite President Emmanuel Macron’s “whatever it takes” approach – throwing as many resources as necessary at dealing with the fallout from Covid – France’s public debt remains substantial, at 112.9 percent of GDP in 2021 (although down from 115.7 percent in 2020), according to the national statistics office INSEE. France was the only country in Europe to see public spending surpass 60 percent of GDP in 2020.
FRANCE 24 looks at what all the candidates are proposing on the economy.
Emmanuel Macron has moved to the right on cultural issues since entering the Élysée Palace in 2017, along with the centre ground of the French electorate. But on economic policy he remains true to the en même temps (“at the same time”) approach at the core of his original presidential campaign, keeping a foot in both the centre-right and the centre-left.
The incumbent and favourite wants to renew the dirigiste (interventionist) approach Charles de Gaulle used in the 1960s for the fourth industrial revolution – proposing to pump €30 billion into high-tech industries including semiconductors, space exploration and the life sciences.
Macron is looking anew to protectionist policies – much like those favoured by his main election rival, nationalist-populist Marine Le Pen – and is looking for a way to force the state to buy French products, although it is unclear how he would circumvent the EU’s restrictive state aid laws.
At the same time, Macron wants to increase the inheritance tax threshold from €100,000 to €150,000 while widening the threshold’s application to indirect relatives of the deceased, such as nephews, nieces and step-children.
As a social liberal, Macron also wants to recognise “how families have transformed” by giving couples who live together the same tax status as married couples or those in a civil partnership.
Valérie Pécresse, candidate for the traditional conservative Les Républicains (The Republicans or LR) party, has based much of her campaign around the charge that Macron is merely a “pale imitation” of a centre-right leader. As such, she hopes to go further than Macron in economic liberalism, proposing to get rid of France’s famous 35-hour working week in sector-by-sector agreements between business groups and trade unions. Pécresse wants to cut 150,000 civil service jobs and abolish companies’ “social solidarity” contributions – which she sees as an “absurd” tax that dents firms’ competitiveness. She also wants to reduce VAT on electricity, housing and cultural goods.
Pécresse is keen to reach out beyond LR’s bourgeois core support base with a proposal to guarantee a 10 percent increase in the net salary of people earning less than €2,800 per month within the next five years.
Keen to attract LR voters that are members of what he terms the “patriotic bourgeoisie”, far-right pundit-turned-candidate Éric Zemmour wants to prove his credentials as an economic liberal, proposing a 15 percent tax cut for small businesses, artisans and farmers. He also wants to reduce the inheritance tax, abolish the tax entirely for the transfer of family companies and allow people to transfer property to relatives tax free. Zemmour also proposes exempting primary residences from property tax and eliminating the annual TV licence fee.
But the far-right candidate also has a protectionist streak, calling for the “full reimbursement” of any state subsidies given to firms that take jobs offshore. He also wants low-salaried workers to receive a 13th month of pay, funding it by reducing national insurance contributions.
Targeting a working-class core vote, nationalist-populist Rassemblement National (National Rally) leader Marine Le Pen has a more statist economic platform than her far-right rival. She wants to intervene to set prices, give out subsidies to prop up faltering sectors of the economy and set up a French sovereign wealth fund to invest in strategic sectors.
Le Pen also favours replacing the current property tax with a wealth tax directed at the rich, totally exempting primary residences. Keen to attract the youth vote, Le Pen wants to get rid of income tax for workers aged under 30 “so that they stay in France and start families here”.
Le Pen’s nationalist-populist rival Nicolas Dupont-Aignan of Debout la France (Stand Up France) is also looking to court workers with the promise of an 8 percent wage increase for all. He has also proposed expanding the role of employees in managing companies and restoring the wealth tax Macron abolished.
Left and far left
The most popular candidate on France’s flagging left and Le Pen’s biggest rival in the battle for a ticket to the second round, La France Insoumise (France Unbowed) leader Jean-Luc Mélenchon hopes to pass a “social emergency law” as soon as possible after taking office, increasing the minimum wage to €1,400 per month (from €1,269.03 at present) and capping salary differences between workers and CEOs at 1 to 20.
He also wants to give 800,000 public sector workers on temporary contracts permanent tenure – while preventing the top companies listed on the French stock exchange, the CAC 40, from paying dividends.
What’s more, Mélenchon wants to bring capital gains tax up to the same level as income tax, introduce a progressive corporate tax and seize all inheritances greater than €12 million (a measure of dubious constitutionality).
The once venerable Socialist Party is a shadow of its former self, having lost votes to Macron in the centre as well as Mélenchon on the far left in 2017. The party’s candidate, Paris Mayor Anne Hidalgo, nevertheless proposes an ambitious economic programme looking to increase the minimum wage by 15 percent, recruit tens of thousands of civil servants and create a new wealth tax she believes will raise €4 billion to spend on environmental “transition”.
Hidalgo also hopes to institute a €5,000 endowment for people who reach 18 to spend on professional or private projects.
Like many of her presidential rivals, Hidalgo wants to reduce the inheritance tax, exempting all fortunes below €300,000 – which would ensure that 95 percent of the population would not pay anything.
Hidalgo’s leftist rival, Yannick Jadot of the Green party, wants to increase the minimum wage by 10 percent and to reduce the hours people have to work. Jadot favours a universal basic income, paid to everybody from the age of 18, and recruiting more than 200,000 new public sector workers.
Jadot also favours increasing VAT on energy to encourage more environmentally friendly behaviour. As the French Greens have so far enjoyed little appeal outside urban areas, Jadot is trying to reach out to rural voters by proposing financial incentives to pass family farms down to relatives.
Betting that the likes of Hidalgo and Jadot have little appeal to the French working class, Communist candidate Fabien Roussel has distinguished himself a throwback to the post-war left, hoping to appeal to a nostalgic nation. Roussel proposes creating 500,000 new civil service posts, increasing civil service salaries by 30 percent, and equalising pay between both men and woman and private and public sector employers within a year.
Far-left candidate Nathalie Arthaud of the communist Lutte ouvrière (Workers’ Fight) party wants to abolish VAT, end “banking secrecy”, exempt workers from “fuel taxes”, and expropriate the entirety of both wealthy people’s fortunes and corporate profits.
Arthaud’s fellow far-leftist Philippe Poutou wants to nationalise energy and pharmaceutical companies, create one million public sector jobs and increase all incomes by €400.
Nationalisation is also on the agenda for Jean Lassalle, leader of the small Resistons! (Resist!) party. Formerly an acolyte of perennial centrist candidate François Bayrou, the rurally-focused Lassalle proposes a “new Marshall Plan” to revitalise the countryside and to exempt firms located in places with fewer than 15,000 from corporation and property taxes.
This article was translated from the original in French.