French Finance Minister Warns of Financial Crisis if Far Right Wins Election
French Finance Minister Warns of Financial Crisis if Far Right Wins Election

French Finance Minister Bruno Le Maire has issued a stark warning that the euro zone's second-largest economy could face a financial crisis if the far-right wins the upcoming elections. Opinion polls suggest Marine Le Pen's eurosceptic National Rally (RN) is on track to dominate the June 30 and July 7 votes, following their recent success in the European Parliament elections.

Le Maire, speaking on franceinfo radio, criticized the RN's campaign promises, which include cutting electricity prices, reducing VAT on gas, and increasing public spending. "When I look at the far right, I see a program that is made of lies," Le Maire stated, urging voters to support candidates from President Emmanuel Macron's centrist party instead.

The RN's platform advocates for protectionist "France first" economic policies and focuses on reducing the cost of living. Despite France's significant public debt, the party proposes higher public spending. This has raised concerns among investors and financial analysts.

French bonds and stocks have experienced a decline this week. S&P Global, which recently downgraded France's credit rating, indicated that the RN's proposed policies could further affect the rating. On Friday, the risk premium for holding French government bonds reached its highest level since early 2017. The spread between French and German borrowing costs is set for its largest weekly increase since the euro zone debt crisis in 2011, surpassing 25 basis points.

Le Maire emphasized that the political instability and proposed economic programs could lead to a financial crisis. "I'm sorry, they [the far right] do not have the means to afford these expenses," said Le Maire, who has been advocating for multi-billion savings to restore France's finances.

While polls show the left has little chance of winning the election, Le Maire also criticized the newly formed leftwing alliance, which aims to lower the retirement age and introduce a new wealth tax. He argued that their policies would be equally detrimental to the French economy.

In response, Marine Le Pen and RN leader Jordan Bardella accused Le Maire and Macron of misrepresenting France's economic situation. Bardella, in a campaign video, promised to reveal the true state of public finances if he becomes prime minister. Le Pen, campaigning in northern France, claimed that the government has been hiding the real impact of their reforms over the past seven years.

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