French election could spark a crisis threatening the entire EU
A few days before the parliamentary elections in France, the far-right party was leading the polls, followed by the far-left. If they win, their decisions could quickly lead to an economic and social crisis, warns Gideon Rachman, a columnist for the "Financial Times".
7:51 PM EDT, June 24, 2024
French President Emmanuel Macron warned that "Europe is mortal," but shortly thereafter, he led his country to early elections that "could plunge the entire EU into a deadly crisis," writes Gideon Rachman, chief foreign affairs commentator at the Financial Times, on Monday.
He reminds us that a few days before the parliamentary elections in France, the far-right National Rally (RN), the former National Front of Marine Le Pen, is decisively leading in the polls. Second place is held by the People's Front coalition, dominated by the radical left. In the best case, a parliament controlled by extreme parties could destabilize France for a long time, the columnist assesses.
"A crisis that would become a problem for the entire EU"
In the worst-case scenario, an extravagant budget and nationalist policies could be adopted, quickly leading to an economic and social crisis that would soon become a problem for the entire EU. Rachman writes that France's fiscal and diplomatic problems would be the first mechanisms leading to a crisis in the EU.
France is in serious financial trouble; public debt is 110% of GDP, and the budget deficit reached 5.5% last year. Meanwhile, the author explains that both the far right and the radical left promise substantial spending increases and tax cuts, which will increase state debt and the deficit, breaking EU rules in the process.
Rachman also recalls the words of French Finance and Economy Minister Bruno Le Maire. He recently warned that the economic program of extreme political groups threatens such a serious financial crisis that it could lead to France being placed under the supervision of the International Monetary Fund.
Another problem arises from the fact that France is one of the 20 countries in the eurozone. If the interest rates on French bonds rise rapidly due to investment risk, the EU could intervene by buying these assets in an emergency. Still, it is unclear whether Brussels or Berlin would agree to this form of assistance for a state that has led itself into a crisis, especially since both the National Rally and the radical left in France are eurosceptic and averse to Germany—the columnist assesses.
The RN program includes a statement about "deep and irreconcilable" differences between France's and Germany's worldviews. The head of this party, Jordan Bardella, its candidate for prime minister, recently threatened to cut France's contribution to the EU budget by 2-3 billion euros per year.
The threat of expulsion from the eurozone "unthinkable"
When Greece fell into a debt crisis, the humbling lesson that prompted it to approve the remedial measures imposed by the European Union was the risk of expulsion from the eurozone. However, trying to discipline France similarly would be unthinkable: after all, since the 1950s, the entire Community project was built around the Franco-German tandem - recalls the commentator.
Thus, France will remain in the eurozone. Still, it will be a source of its problems, which could have a disastrous effect on the cohesion and stability of the euro area when the Union needs to close ranks due to the threat from Russia - warns the author.
What is worse, if the National Rally comes to power, its first instinct may be to confront Brussels "in the name of French sovereignty," and the economic crisis could provoke even more belligerent and nationalist sentiments - the columnist continues.
It is important to remember that decades of experience teach that one should not bet on the defeat of the EU even when it is exposed to mortal danger - concludes Rachman.
