French plutocrats may regret keeping mum on Le Pen
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Pierre Briancon
LONDON, June 20 (Reuters Breakingviews) -Marine Le Pen published no fewer than 16 thematic “booklets” to detail her platform when she was running for the French presidency two years ago. They covered areas such as immigration, agriculture, education and health. Animal protection, too. Not one was dedicated to the economy or business.
French corporate chiefs and lobbies don’t seem too worried about this. They are keeping quiet on the prospect that Le Pen’s far-right party, Rassemblement National, might lead the country’s next government after the two-round election on June 30 and July 7. If it does, they may regret their embarrassed silence.
Granted, no one wants to pre-emptively offend a finance or industry minister. And with the far right grabbing 32% of the vote in the June 9 vote for the European Parliament, and rising in the latest national polls, business leaders also worry that taking a stand against Le Pen’s policies might upset some of their employees. Moreover, a public stance by “the bosses” — as they are called by the French with some condescension — might backfire.
To be fair, the head of the business lobby Medef did criticise the programmes of both the far right and the hard left on Thursday. No major business figure has for now expressed support for Le Pen as U.S. financiers like Steve Schwarzman or Bill Ackman have done, to various degrees, with Donald Trump, the Republican presidential candidate. The newspapers, radio and TV stations controlled by Vincent Bolloré, the main shareholder of media conglomerate Vivendi VIV.PA, are actively promoting the idea of a joint platform between the RN and mainstream conservatives. But Bolloré himself is keeping mum.
Prime minister hopeful Jordan Bardella, Le Pen’s protégé, has also begun to acknowledge widespread worries about his party’s fiscal plans. He has announced that he would delay some costly measures, such as a recall of Macron’s recent pension reform, and first order “an audit” of France’s finances. But his party platform is not business-friendly.It contains no major tax cuts for companies or the rich. Le Pen intends, on the contrary, to reintroduce a tax on “financial wealth” similar to the one that Macron abolished after he became president in 2017.
The business world’s lack of public support for Macron is as striking as its silence in opposing Le Pen. Gone are the days in 2017 when Bernard Arnault, the controlling owner of luxury giant LVMH LVMH.PA, said publicly that he would vote “without hesitation” for Macron.
In private, some business leaders express the hope that the RN will have to water down most of its outlandish pledges when faced with the reality of governing. But even making good on just a few promises would be costly. The RN’s programme includes tax cuts for households — like a reduction from 20% to 5% of value-added tax on fuel — and major spending promises — a plan to nationalise highways, for example, would cost an estimated 40 billion euros.
That would cause a major budget crisis in a country where public debt could reach 113% of GDP next year. That, in turn, would further unnerve bond markets and increase the cost of credit for French companies, which are already among the most leveraged of advanced economies. If the RN’s advent leads to financial mayhem, France’s “bosses” may realise a bit too late that they should have been more vocal.
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CONTEXT NEWS
The head of France’s Medef business lobby attacked the campaign plans of both the far right and the hard left on June 20, Bloomberg reported.
There is “unbearable financial lightness” in the economic platforms of both Marine Le Pen’s Rassemblement National (RN) and the united left’s New Popular Front (NPF), French finance minister Bruno Le Maire said in an interview with Le Monde published on June 18.
He warned about a “debt crisis” if either side won the June 30 parliamentary election and urged business leaders to “take a stand” against “the far right and the far left.”
The RN is leading in the polls in the runup to the snap election called by French President Emmanuel Macron, with 35% of voting intentions, according to the latest IFOP survey. The NPF would get 26%, against 19% for the Renaissance movement supporting Macron.
Emmanuel Roman, the managing director of U.S.-based global asset manager PIMCO, said in a June 18 interview with Le Monde that after reading the RN’s electoral platform, he found “not a single element addressing the real macroeconomic issues.”
“An economic policy that doesn't make sense is immediately punished by the market,” he added.
Share performance of France’s five largest companies over last month https://reut.rs/4b8Nkyy
Editing by Francesco Guerrera and Streisand Neto
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