Change at all costs

Hard left! After the United Kingdom, it is France’s turn to take a left turn. On both sides of the Channel, which separates the two countries, the population is thirsty for change. But the price to pay risks being high.

As much as the elections Thursday in the United Kingdom did not reserve any surprises. At the end of a campaign that made few waves, the Labour Party easily regained power after 14 years of Conservative rule.

As much as the elections in France on Sunday gave rise to twists worthy of an action film. A film that ends in a damp squib, without us knowing who won.

The losers are easier to identify, starting with the National Rally (RN) of Marine Le Pen and Jordan Bardella, which finished third, while the results of the first round had given it a glimpse of an absolute majority. Well no! It is reassuring to note that a solid majority of French people stood up against the extreme right.

President Emmanuel Macron also emerges considerably weakened from this awful gamble of triggering a snap election. Because of his arrogance, France finds itself unnecessarily in a zone of political turbulence, since none of the three major blocs has obtained a majority.

It is very difficult to predict how the behind-the-scenes games of the coming days will play out.

Will alliances make it possible to create a coalition government? This is not in the French tradition, even if several European countries succeed in doing so.

Without a winner, will France end up with a government of technocrats, managing current affairs in place of politicians? This is far from being a panacea, even if it has already been seen in Italy or Belgium.

Whatever the scenario, the agenda of the New Popular Front (NFP), the left-wing grouping that came out on top, could go to the wayside.

First, it is not clear that the coalition, formed less than a month ago, will hold up. The discord risks cracking the grouping, some of whose members – the Socialists, for example – could rally to President Macron’s centrist bloc, Ensemble.

And then the promises of the left will be difficult to fulfill.

On both sides of the Channel.

In the United Kingdom, Labour has been a dream come true for voters fed up with anaemic economic growth, rising living costs, difficulties in obtaining health care, crumbling schools… and the escapades of former Prime Minister Boris Johnson, who allowed himself to party during COVID-19.

But turning the tide will not be so easy. The new Prime Minister, Sir Keir Starmer, has promised to improve public services by hiring thousands of health and education workers. He wants to double housebuilding, invest in green energy, increase military spending from 2.1% to 2.5% of GDP…

All this without raising taxes on the middle class and without austerity. All this while historically high debt and interest rates leave little room for maneuver.

France is also on a tightrope.

Voters were disillusioned with Emmanuel Macron’s policies, giving him little credit, despite his good moves, such as the creation of two million jobs since he entered the Élysée in 2017. His rigidity, particularly during the contested pension reform, gave the impression that he was out of touch with ordinary mortals, earning him the nickname Jupiter.

But the Hexagon is stuck.

The country has accumulated a debt that reaches 111% of its GDP, making it one of the most indebted countries in the eurozone. And its annual budget is in the red, with a deficit of 5.5% of its GDP, the fourth largest deficit in the European Union, behind Italy, Hungary and Romania.

Despite the heavy pressure already exerted on public finances, the NFP program plans to widen the annual deficit by 179 billion more, with new spending and tax cuts, according to a compilation by the Montaigne Institute.

This is much more than what was planned in the Ensemble programme (additional deficit of 20 billion) and the RN (additional deficit of 71 billion).

Change, at all costs, risks leading to a fiscal cliff. Politicians who have made overly ambitious promises will find themselves caught in the middle. Will they choose to disappoint their voters? Will they prefer to be punished by the financial markets?

Liz Truss’s descent into hell should serve as a lesson to politicians. In 2022, the former British prime minister was ousted from office after just 45 days. By decreeing tax cuts on credit, she had caused interest rates to soar and the currency to plummet. A real disaster.

Gone are the days when Western governments could borrow without fear of soaring interest rates. Politicians need to think twice before making slogans and promises to win votes.