Is this the effect of inflation? Since the start of the (short) French election campaign that began on the evening of June 9, in the wake of the European elections, finance talk has shifted from billions of euros, or even tens of billions, to hundreds of billions. Majority and opposition alike are throwing these immense figures at each other, even though they are the result of approximate calculations based so far on promises alone.
“A cost of at least 100 billion,” said Emmanuel Macron at his June 12 press conference, about the Rassemblement National (RN) platform. “Hundreds of billions of euros in additional spending” for the left’s program, warned Economy Minister Bruno Le Maire. “A thousand billion euros of additional debt” since 2017, responded the RN and the left in chorus, referring the government to its own fiscal irresponsibility since 2017.
And yet, neither the incumbent majority nor the opposition can claim any sincerity when it comes to these figures. The government, the first to release fanciful estimates of its opponents’ promises, was recently sanctioned by ratings agency Standard & Poor’s. The left, for its part, sees in these colossal figures the proof of its political will, while the far right is already retreating, tacitly admitting that its ambitious promises on pensions or purchasing power will not stand the test of reality.
“Nobody is giving an honest trajectory, any more than in 2022, but that’s not a problem in the French public debate,” says Xavier Jaravel, associate professor at the London School of Economics, who deplores the virtual absence in France of authoritative, non-partisan institutions on the subject during election periods.
‘Golden budget rule’
At this stage, none of the campaigning parties has estimated the cost of its own policy platform, leaving it to others to do so. Even Prime Minister Gabriel Attal, who promised a “golden budget rule” at his press conference on Thursday, June 20, dismissed the subject out of hand. “The measures we are proposing are financed,” he repeated. “If there is anyone who is credible and who will take on the efforts required to finance the program, it’s us! We’re the only ones!”
The Macron bonus – raised to €10,000 – costs nothing because it’s money that would not have been paid out, claims Attal, ignoring the risk of a substitution effect with salaries, although economists have described this. The abolition of notary fees for transactions of less than €250,000 will cost €2 billion, but will replace a tax cut promised at the beginning of the year, which has already been accounted for. And the future reduction in contributions for employees earning the minimum wage would be achieved “at constant cost”, according to Finance Minister Bruno Le Maire’s entourage. As for the rebate on electricity bills, this is the result of changes in the market, and therefore has no budgetary impact. However, the Institut Montaigne, a liberal think tank, puts the cost of these measures at between €12 and 14 billion. And it has not examined other measures, such as the €1 a day health insurance scheme.
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