(Bloomberg) — A coalition of France’s left-wing parties presented a manifesto to pick apart most of President Emmanuel Macron’s seven years of economic reforms and set the country on a collision course with the European Union over fiscal policy.
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The group — which unveiled its program days after Macron called a snap legislative election — wants to reverse the government’s pension reform, reinstate the right to retire at 60, raise the minimum wage, and impose an extra tax on the profits of certain industrial firms, their leaders told reporters Friday.
“We will finance all of this very ambitious project by taking from the pockets of those who have the means to give,” Socialist Party head Olivier Faure said.
The new alliance — as well as attempts on the right to form a coalition — signals a potential disaster for Macron’s party. Because France has a two-round electoral system with a bar to move onto the second vote, many of Macron’s centrist Renaissance candidates may not even make it to the final election day.
The political uncertainty and increasing likelihood the next government will push through costly measures for public finances has spooked investors. On Friday, French bonds underperformed their safer German peers for a fifth day, widening the 10-year spread by a record to 79 basis points, the most since 2017.
French Finance Minister Bruno Le Maire warned earlier in the day that victory for the left-wing alliance in the snap vote would lead to economic collapse and the country’s exit from the EU as he put fears over the economy at the center of the campaign.
“Their program is complete madness,” Le Maire said on Franceinfo radio. “It will guarantee downgrade, mass unemployment and an exit from the European Union.”
The CAC 40 Index is down nearly 6% on the week, heading for its biggest weekly drop since March 2022 and surrendering what was left of its year-to-date gains. The slump put France at risk of losing its crown as the largest equity market in Europe.
Officials in the new leftist bloc dismissed Le Maire’s claims regarding their economic program. They say Macron’s tax cuts for wealthy individuals and on capital have left a gaping hole in the public finances.
“In our project we will have a revised budget very quickly to put in place our measures,” said Yannick Jadot, a senator in the green party. “We’ve not run all the models on public finances, but that the president and government give us lessons on fiscal measures is a joke.”
Polls show the bloc of parties spanning former President Francois Hollande’s Socialists to the Communists and far-left France Unbowed is on track to form the second-largest group behind Marine Le Pen’s far-right National Rally.
If the coalition were to win the election, Macron would be expected to nominate a prime minister from the group. Asked whether far-left firebrand Jean-Luc Melenchon, of France Unbowed, would be put forward, the party’s national coordinator, Manuel Bompard, said no decision had been taken.
“We’ve agreed that if we manage to take power and win the election, it’s the parliamentary group with the biggest number of lawmakers that’ll make a proposition,” he told reporters. “Jean-Luc Melenchon is perfectly capable of being prime minister, he’s expressed this. Jean-Luc Melenchon is perfectly capable of being a candidate in the legislative election, it’s his decision to be or not.”
The manifesto papers over significant gaps between alliance members on many policies. But the compromises they’ve reached would still mean a radical shift in economic policy in France, and a weakened commitment to fiscal discipline that would undermine relations with the European Commission, the EU’s executive arm.
The left-wing alliance said it will refuse the EU’s fiscal pact governing debt and deficits and propose a European climate and social emergency deal. It also said it would freeze prices of essentials such as food, energy and fuel by decree.
Speaking on the sidelines of the conference to launch the group’s program, Faure said the government under the leftist banner would quickly head to Brussels to demand changes to fiscal rules.
“The EU, which is worried about what’s happening today, will negotiate with us so we can advance together,” he said.
Le Maire has joined Macron in warning of the consequences of far-right or far-left parties coming to power. But those alarms may fall flat this time around, given the precipitous drop in support for the president’s party and after some of the more extreme groups have moderated their platforms.
Macron dissolved the National Assembly on Sunday and announced a two-round legislative ballot on June 30 and July 7. This came after his political group was trounced by the National Rally in European Parliament elections.
Unions have called for protests across the country on Saturday, with CGT head Sophie Binet warning earlier on Friday against France falling into “fascism.”
–With assistance from James Hirai.
(Updates with senator comment in 10th paragraph.)
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