France will hold early elections on June 30th, plunging the country into a long period of instability.
The polls for the election, which has attracted worldwide attention, currently show the far-right National Rally (RN) party in the lead, with the far-left coalition government of the New Popular Front (NFP) in second place and French President Emmanuel Macron’s centrist bloc in third place.
An analysis by Gideon Rachman in the UK’s Financial Times predicts that an extremist-dominated parliament would drag France into a prolonged period of instability, while also highlighting the risks of adopting wasteful, nationalistic policies that could quickly lead to an economic and social crisis for France.
The analysis, titled “France could cause the next euro crisis”, states that a French collapse could become a problem for the EU for financial and diplomatic reasons.
Debt crisis warning
In the last quarter of 2023, France’s public debt to gross domestic product (GDP) ratio reached 110% and the budget deficit reached 5.5% of GDP. However, according to Gideon Rachman, both the far-right and the far-left are adamant against significant spending increases and tax cuts that would increase the government debt and deficit.
French Finance Minister Bruno Le Maire warned that a victory for either extreme could lead to a French debt crisis and an audit of the country’s finances by the IMF and the European Commission.
The French minister assessed that “opening the door to public spending at a time when fiscal balance needs to be corrected would place France under the scrutiny of Brussels and the International Monetary Fund.”
Could undermine European stability vis-à-vis Russia
The analysis said the second biggest problem was France’s use of the euro currency, as both the far-right and far-left in France have eurosceptic attitudes. Both are unhappy with EU directives, but also express hostility towards Germany. This is why Germany and the EU, currently struggling with the national budget, are thought to be reluctant to bail out France from its financial debts.
On the other hand, it seems impossible for France to threaten to leave the euro, as Greece has done. The analysis suggests that France is likely to remain in the EU and the single currency, but will likely act as a spoiler. This situation is expected to undermine European harmony and stability at a time when the EU is trying to unite against the Russian threat.
What if the right wins?
The analysis suggests that the far-right RN, which is ranked first in the opinion polls, is expected to represent French sovereignty in opposition to Brussels if it wins the election.
It is thought that a potential economic crisis, along with conflicts with Brussels and Berlin, could lead the RN to revert to its nationalist and confrontational instincts, but the realities of government could also force the far-right to compromise with the EU.
The RN had quietly abandoned its euro exit rhetoric after its defeat in the 2017 presidential election.
