Populist leader Marine Le Pen has called for a nationwide audit of France's finances to understand how the country fell into a financial crisis that threatens to tip the country into collapse before a new government is even formed.
France's debt has risen sharply after the coronavirus lockdown and a massive spending boost due to Europe's energy crisis Climbed Its debt stands at more than 110% of its gross domestic product (GDP), or more than €3 trillion. The debt-to-GDP ratio is now the third worst in Europe, behind only terminally indebted countries Greece and Italy.
Meanwhile, the budget deficit has risen to 154 billion euros, or about 5.5% of the country's economic output, putting Paris at odds with Brussels for violating the EU's 3% limit. Potentially This could expose France to financial sanctions from the EU, including cuts to its coronavirus recovery fund and quality-of-life subsidies shared among member states.
Marine Le Pen, leader of the National Rally party, commented on the dire state of the finances. said “When I realised I was worried about France's financial situation and asked for an audit of the state finances during the parliamentary elections, I was told everything was under control,” he said this week.
“Today, everyone is pretending to have discovered a catastrophic situation. A major commission must be set up immediately to audit the state accounts.”
The budget crisis poses a major challenge for the incoming government of Michel Barnier, the center-right former European bureaucrat and one-time Brexit villain who was installed as prime minister by President Emmanuel Macron earlier this month. Barnier must present a budget to the National Assembly next month, but given the deep divisions in France's parliament, it is by no means certain that it will be passed.
After meeting heads of state at the Elysee Palace on Wednesday, Barnier said the country's financial situation was “very serious” and was reportedly considering raising taxes to tackle mounting debts and deficits. Le Monde Reports.
But the new prime minister's desire to raise taxes could impede his ability to form a government, which is currently underway. Done Mr Barnier wants it to come into force within days – and to do so he needs the full support of Mr Macron's centrist neoliberal party, which is united by its pro-business, low-tax agenda.
Former Prime Minister Gabriel Attal, head of Macron's faction in the National Assembly, openly opposed the idea. say He said raising taxes would be “terrible for France” and risk losing the “economic attractiveness” gained by Macron's tax cuts.
And Macron's closest ally and current interior minister Gerard Darmanin said it would be “out of the question” for Macron to take part in the new government, let alone support it in general, if it were to raise taxes.
The push for tax increases has also drawn backlash from the populist National Coalition, whose leader, Jordan Bardella, said: Discuss The Barnier government should be more creative than its predecessor and seek to cut government spending.
“There are a thousand ways to cut spending before you even think about raising taxes a little,” Bardella said. “There are also a thousand ways to raise revenue. Without imagination and courage, Michel Barnier risks quickly losing power.”
Indeed, an anonymous source within Barnier's La République party told broadcaster BFMTV: said Speaking about the unstable political situation, he said: “I'm a bit worried… things could get worse… Macron will be the first to lose… We will go from a fragile solution to no solution at all.”
