She assures him: She has changed. Marked by the debate between the failed rounds of 2017, in which she seemed unsure of her calculations, in 2022 Marine Le Pen checked her copy. Exit the European Union or retire at 60 for everyone. This time, the National Rally candidate for the presidential election is banking all on her purchasing power proposals… and on a program she believes is balanced. What is it really? Franceinfo has deciphered its proposals.
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The principle of economic patriotism
The Covid-19 pandemic and the war in Ukraine have reminded us that the shortcomings of globalization are associated with bottlenecks, delays, price increases… Marine Le Pen therefore proposes introducing “economic patriotism” and “localism” in order to “reindustrialize and produce wealth in France”. Asked by franceinfo, his chief of staff, Renaud Labaye, admits that “we cannot relocate everything”. He asserts that a focus on “industry”, the products necessary for “sovereignty” and sectors with “high A project very similar to that of France Relance, founded by Emmanuel Macron in 2020. “We cannot deny that it was a good idea to want to relocate the strategic sectors,” acknowledges Renaud Labaye, although he believes the government’s one billion euro relocation budget is “too low”.
Will Lepenist resettlement only take place within our borders, with no regard for our European neighbors? Impossible, says Anne-Sophie Alsif, chief economist at BDO France, an economic consulting firm. On the one hand because “France is a very small market, less attractive for companies than the European Union”. On the other hand, because “value chains already exist at European level”, with a distribution of the various production stages according to the economic performance of the respective country and the skills available there. Production exclusively on our territory would entail much higher costs and, consequently, a higher price for the consumer. “Links to other EU countries will be possible,” warns the RN candidate’s adviser, who nonetheless believes that by “breaking the vicious circle of relocation – job losses – lower purchasing power, the French will find the margin to buy products whose the price will have been a bit higher”.
The RN candidate also wants to cut France’s contribution to the EU budget by “five billion euros”. Problem: Each member country’s contribution is set according to identical rules for seven years. In theory, France is committed until 2027. In the event of an election, this would not prevent the candidate from starting negotiations before that date, her team assures. Some countries, such as the United Kingdom or the Netherlands, have already managed to obtain rebates: the likelihood of a rebate is therefore considered “completely possible” by certain economists, such as Eulalia Rubio, researcher at the Jacques-Delors Institute, at the request of TF1. On the other hand, it seems “impossible” to him that it is of the magnitude hoped for by the RN. But if France fails to pay the contribution due in full, it faces prosecution and sanctions, including the end of the generous Common Agricultural Policy (CAP) subsidies from which French farmers largely benefit.
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Marine Le Pen’s economic patriotism doesn’t stop there. The far-right candidate wants to establish a “national priority” in access to public contracts. But this measure violates European competition law, believes the Terra Nova Foundation, which is labeled as centre-left. According to the think tank, this decision would “first lead to higher prices for the public sector and then for the taxpayer or the user”.
Purchasing Power Measures
Marine Le Pen’s campaign revolved around her pledge to restore the spending power of the “forgotten” of Emmanuel Macron’s five-year tenure. However, his program multiplies the proposals that benefit the portfolios of the wealthiest at least as much as those of the working class.
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So the candidate promises “Reduction of VAT from 20% to 5.5%” on energy products, especially fuels. This would be tantamount to “subsidizing wealthy households that consume a lot of fuel because of their large vehicles,” explains Mathieu Plane, an economist at the French Observatory for Economic Conditions (OFCE). Similarly, reducing tolls by 15% would benefit all motorists. “The motorway is generally used for long trips (…) and less often for daily trips of the home-work type,” emphasizes Terra Nova.
Unlike many of its competitors, who decided to raise the minimum wage to improve the purchasing power of the most vulnerable workers, Marine Le Pen wants to encourage companies to raise wages 10% below triple the minimum wage (€4,947 gross, ie more than 1,760 euros above the median salary) by exempting this employer contribution increase. However, the Institut Montaigne, a liberal think tank, believes that this exception would mainly create a windfall effect: it would benefit companies that had already planned to increase wages without new increases.
What about eliminating VAT on “Hundreds of basic necessities (…) as long as inflation is one point higher than growth”? In theory, it could ease the budgets of both the humblest and wealthiest households, but it’s difficult to gauge the benefit to consumers as the list of affected products is not complete. Marine Le Pen listed “salt, pepper, oil, noodles, sanitary napkins, diapers” on BFMTV. However, most of these items already benefit from 5.5% VAT. The effectiveness of this measure also depends “on the behavior of manufacturers” and retailers, who could use the abolition of the tax to increase their prices, explains Brice Fabre, an economist at the Institute of Public Policy. Then Marine Le Pen could resort to price freezes, her chief of staff assures.
Taxation in favor of the richest
Again, the fiscal policies of Marine Le Pen’s program would primarily benefit the wealthiest and corporations. The candidate therefore proposes exempting all young workers from income tax up to the age of 30 so that they “stay in France and start their family with us”. In fact, this measure would mainly affect the wealthiest young people. With an average annual income of 7,490 euros, the vast majority of 18 to 25 year olds are not subject to income tax. The 26- to 30-year-olds are “in most cases exposed to a very low tax burden themselves” with their income (average 16,220 euros), emphasizes the Terra Nova think tank. “Where the precarious young person earns almost nothing, the young academic collects a few thousand euros and the state loses a few billion more.”
The gifts to the wealthiest would also affect inheritance taxation. Marine Le Pen wants to replace the wealth tax (IFI) with a financial wealth tax from which the primary residence will be exempt. A measure that “protects the middle classes who have sometimes entered the ISF [prédécesseur de l’IFI] because of the simple valuation of a family real estate inheritance”, the candidate assured the Parisian. Currently, the IFI concerns real estate inheritance of more than 1.3 million euros, from which the existing debts must be deducted, as well as a 30% reduction on the main residence. In other words , a Frenchman whose real estate fortune consists of a €1.7 million primary residence, is not paying it.
The candidate also plans to reduce inheritance tax. A “textbook case of the empty gift”, according to Terra Nova. And with good reason: like any inheritance law reform, this one primarily affects the wealthiest French. “85 to 90% of direct line inheritances (parents to children) are exempt from tax,” economist Clément Dherbécourt told franceinfo.
Funding probably underestimated
Criticized about the feasibility of her economic program, Marine Le Pen has released a calculation document detailing how she will balance her budget. But his explanations are far from convincing the economists, who for many consider the costs of the planned measures to be greatly underestimated. The Institut Montaigne therefore estimates the level of expenditure at 119.6 billion euros, a far cry from the forecast 68.3 billion. According to economists, some of the measures identified as “without budgetary consequences” would also cause real costs for the state. “It’s not a finance law, it’s a scale of measures,” said Cabinet Director Marine Le Pen.
Also unclear is the revenue that would offset the expenses named by the candidate. The fight against fraud should bring in 15 billion euros. But “wanting to fully recover the amount linked to the fraud is illusory,” recalls Xavier Timbeau, since certain parameters are difficult to control (cash payments, overtime, etc.). “We can hope to get seven billion euros back from social fraud, but not before 2027. (…) As far as tax evasion is concerned, exceeding 5 billion euros seems complicated to me,” said lobbyist Agnès Verdier-Molinie in Le Parisien. At the National Rally, Renaud Labaye relies on “a committed ministry” and “political will” to achieve the goal.
Some recipes, like the forecast that “the sharp drop in immigration will make it possible to reduce many expenses related to insecurity”, estimated at two billion euros, seem even more vague. “It is an estimate of what the reduction in crime will bring, for example there will be savings in the budget of translators in the courts or in the damage to police cars,” explains Renaud Labaye.