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France has ended up with a socio-political Frankenstein
Deformed French election lets the Corbynista Left win a victory against nature
Emmanuel Macron has jumped from the frying pan into the fire. He must now play second fiddle to an ideological Left that poses a much greater threat to economic sanity than Marine Le Pen’s Right-wing Rassemblement National.
The stated intent of the new Front Populaire is to soak the rich with wealth and capital taxes, reverse Mr Macron’s free market reforms, impose price controls on food, fuel and energy, and return France to the wonderland of retirement at 60.
It is as radical as its forebear under Léon Blum in 1936, which led to the ejection of France from the fixed-exchange Gold Standard in short order. It openly calls for a violation of EU budget rules, sorely testing German political consent for the euro.
The Montaigne Institute estimates that the total package, if ever implemented, would amount to a runaway fiscal expansion worth €179bn (£151bn) a year. That adds up to 6.8pc of GDP, several times greater than the immortal Truss budget.
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This is in a country where the fiscal deficit was 5.5pc of GDP last year and is on a worse trajectory so far this year, unlike the austerity under way in Germany and most of the eurozone. France already faces an excessive deficit procedure as Brussels reactivates the EU Stability Pact.
“It is exorbitant and would destroy everything we have achieved over the last seven years. The immediate risk is a financial crisis,” said outgoing finance minister Bruno Le Maire.
