Nobel Prize in Economics in 2014 and Honorary President of the Toulouse School of Economics (TSE), Jean Tirole Scholarships The Midi broadcast an exclusive platform in which he destroys Marine Le Pen’s economic program point by point a week before the second round of the presidential election.
The far right has never been so close to power since World War II. His entry into business would have major implications for our society and the values of our country. His candidate’s desire to leave Europe and his democratic principles to get closer to populist leaders like the Hungarian and Polish leaders, or even a dictator like Putin, seem particularly worrying. These points are rightly called many times to block it. But what about the economic program?
The management of a state can be compared to that of the budget of the family or of a company. When you borrow, you need to spend the money so that you can repay it, you need to be credible, and you need guarantors. For France, these three criteria translate as follows: preparing for the country’s economic future, gaining the trust of lenders and the support of Europe.
A Prévert style list
Marine Le Pen’s program is a Prévert-style list of new releases, largely underestimated at €68 billion/year, financed with the help of, unfortunately, partly fictitious revenues. Starting with savings of 16 billion/year linked to immigration measures. This calculation is based on air: all studies show that immigrants cost next to nothing in terms of public money, because the social security contributions of those who work compensate for the costs charged to our social security system. The 15 billion in new revenues that the candidate promises to achieve by fighting tax and social fraud seem hypothetical – the revenues that are not will in any case be generated by the implementation of European regulations on e-commerce and electronic invoicing (to fight effectively against VAT fraud), and through the Health Insurance program against social fraud. And what about the 8 billion in savings on the functioning of the state (how will it achieve these savings?) or the 2 billion corresponding to hypothetical cuts in spending usually related to insecurity?
Conversely, the cost of the spending program seems to be grossly underestimated. This is especially true of the highly controversial topic of pensions (the cost of which is underestimated by 17 billion, according to the Institut Montaigne). There is no miracle solution. Successive reforms have allowed partial rebalancing of our pension system in recent years, but it remains fragile. We may want to consider a new reform to consolidate the system, raise the level of certain pensions, take better account of hardships. But to achieve this, there are only three sustainable solutions: (1) increasing social contributions, already extremely high in France and weighing on workers’ purchasing power and unemployment factor, (2) reducing the pension amount, or (3) working longer as is the case in other developed countries. The choice between these three options is a social choice. On the other hand, lowering the retirement age to 60 will bankrupt our system, with major consequences for the most underprivileged.
“The xenophobia of his program will deter doctors, scientists and engineers”
The most astonishing of all these proposals is that this public money will not allow us to prepare for the future, nor to reduce inequalities, as spending is misdirected. To cite just one example, a measure by Ms. Le Pen would exempt a top student under 30 who earns five times the minimum wage from income tax.
It would also be necessary to add up the direct costs for citizens and businesses; the xenophobia of his program will deter the doctors, scientists and engineers we need and deprive our companies of the labor they need.
After the “all it takes” of the Covid period and the invasion of Ukraine, and in preparation for possible new crises (new viruses, military threats, general protectionism), we can no longer load the boat. Marine Le Pen’s program essentially finances consumption and includes next to nothing that would enable the creation of collective wealth – apart from the cut in production taxes, which has already been initiated by the current government. It is a program that never projects itself on the sources of our purchasing power of tomorrow, education, higher education, research and development. It is not an answer to the climate crisis that will hit our children and grandchildren hard (not to mention that the reduction in VAT on petroleum products, the decommissioning of wind turbines, the solar moratorium should lead us to more to buy expensive carbon electricity abroad).
Marine Le Pen’s France, a European version of Argentina
To fund its program and attract job-creating companies, Marine Le Pen needs the confidence of investors. Public debt has increased from 100% of GDP to almost 116% of GDP, but this has not affected the credibility of the French state because a large part of the reforms implemented (in the labor market, vocational training, taxes) to support growth and enable unemployment to fall. In other words, the markets believed that this increased debt was sustainable because France had embarked on a path of economic growth. Conversely, the lack of foresight of Marine Le Pen’s program will not reassure the latter, who will see in France a European version of Argentina (formerly one of the richest countries in the world, sunk by irresponsible public management).
Trust is also based on attitudes. Like Putin and Trump, Marine Le Pen hates recognized experts, equated with an “above ground elite” and especially potential adversaries. However, if the experts are wrong, they are far less likely to be wrong than those who have neither the training nor the time needed to understand the complex problems of today’s world; and they are not looking for votes. Had she been in power, Marine Le Pen would have taken problematic stances on the issue of the vaccine and health pass, both in health and economics.
France is a small country and needs Europe to exist on the geopolitical stage: to protect itself, to negotiate international agreements, to regulate digitally, to fight tax evasion. But also to face a possible new economic crisis. The fact that the indebted European countries are holding out today is partly due to the “whatever it takes” of the European Central Bank and to the progress of European construction over the past ten years, including at budgetary level with the European recovery plan of which France took advantage to fund its own investment plan.
“A Frexit That Doesn’t Say Its Name”
However, if Marine Le Pen stops talking about leaving Europe and the euro (the “Frexit”), her program will amount to European rules and will immediately trigger a deep crisis in the Union, with immediate consequences for the fiscal credibility of France. Our European neighbors will never accept the creation of a “European Alliance of Nations” that would gradually replace the Rassemblement National candidate in the European Union, the questioning of the free movement of goods and people, the revision of the constitution that the primacy of French law over European law, or the unilateral reduction of the French contribution to the EU budget. It’s a Frexit that doesn’t say its name. In the event of difficulties, we would have neither the ECB to protect ourselves against expensive loans, nor European recovery plans; and that would mean the end of the CAP that supports our farmers and rural development so much.
French people with a lack of purchasing power, whose work is difficult, who are concerned about their future and that of our planet, young people seeking work and training, will not find answers to their expectations in this program. In our terrifying world, it’s important to resist the sirens of a hypocritical and unfunded program. Let’s think twice before adopting a policy that will permanently impoverish our country.