The writer is a former French minister of state for Europe
In the European parliament elections of 2014, France’s Socialist and conservative parties suffered losses and Marine Le Pen’s far-right forces made strong gains. She called for immediate national parliamentary elections but did not get them. Ten years later, it has been a different story — with uncertain consequences for France’s political stability and its economy.
In early July, the National Assembly elections called by President Emmanuel Macron produced a legislature split into three blocs: a broad and internally divided leftist coalition, Macron’s centrists and the far right. Since then, the most powerful offices have been distributed in a way that is less than fully aligned with the results. The far right has no representatives in these posts. The far left has some, thanks to far-right votes. The centrist camp, despite being the biggest loser of the elections, has the largest representation.
For various reasons, this is a dangerous game. Politically, it gives the impression that the 10mn people who voted for the far right are lower-class citizens. It fuels resentment at France’s democratic system, which does not work for all. In the short term, centrists, Socialists and mainstream conservatives could work together. But this must be a temporary arrangement, otherwise the only alternative to such moderate groups in future French elections will be the far right or far left. We can be sure that, if either gets into power, they will do to their opponents what has just been done to them: deny them influential positions in the legislature.
Economically, these games could jeopardise all France’s recent progress, while failing to confront the need to raise productivity and control public expenditure. Over the past 10 years, a new business spirit has invigorated the country. Foreign direct investment has boomed. Firms have come in large numbers to the annual Davos-like event “Choose France” to promote their investment in France. Unemployment has fallen and purchasing power has been protected. Unlike in some other OECD countries, income inequalities have not increased. Most economic indicators have turned up, except for productivity and the public finances.
The election campaign ignored these issues. Rather, parties, especially on the extremes, advocated higher taxes to finance even more spending and measures that would complicate doing business in France. To level off income inequalities, the same recipe came from the far left and far right: a higher minimum wage (when France already has one of the highest compared with the median wage), higher taxation on “the rich” (a vague notion), and a lower retirement age. Such measures would reverse 10 years of policies that made business in France more attractive and boosted employment.
France’s real issues are elsewhere. They include the combination of high taxation with poor access to public services outside big cities. France has among the highest levels of redistribution, capping inequalities of income, but this hides deep regional inequalities. According to Yann Algan, a professor at HEC Paris business school, 60 per cent of “angry French” are critical of the high level of taxes, while many complain about less accessible public services. This is understandable.
Even though the country has some of the OECD’s highest tax-to-GDP and public spending-to-GDP ratios, many outside big cities struggle to access health services, endure poor transport facilities and grapple with a deteriorating education system. These regional imbalances are fuelling anger. Rising educational inequality, between those who know how to access quality schooling and those who do not or cannot, raise parental fears for their children’s future. Most of the middle class feel the heavy weight of taxes and are worried about slipping down the social ladder. There is a narrow margin between the “upper middle class”, who earn over €4,000 a month, and the lower level.
France’s low productivity and strained public finances cannot be solved by reversing the pro-business policies of the past decade. Political polarisation cannot be solved by creating a new polarity between “the extremes” and the “republican centre”. The productivity issue demands better education and freedom of entrepreneurship, to allow agility in the working space. The public finances problem demands spending restraint, starting with social expenditure, which amounts to 32 per cent of GDP. The political impasse demands moving away from a single centrist party, as soon as the 2025 budget is approved. France needs a revived centre-left and a revived centre-right if it is to recreate alternatives to the extremes.