What are the consequences for the French economy of the programs of Marine Le Pen and Emmanuel Macron?

The use of an econometric model makes it possible to evaluate the impact of the programs of Marine Le Pen and Emmanuel Macron on the French economy.

Return match between Emmanuel Macron and Marine Le Pen, five years after 2017. At the end of the Covid crisis and as Europe is rocked by the war in Ukraine, both are following a very different economic trajectory in their respective programs. What will their impact be on the French economy?

An econometric model developed by French academics, Macsim II, that is, a kind of model of the French economy that has hundreds of equations and reproduces its behavior in the light of different economic policies, makes it possible to get an idea of ​​​​the possible consequences of the measures proposed by the two candidates.

No dramatic performance gap between the two candidates

First rather surprising conclusion: over the first two or three years of the five-year term, there is no spectacular performance gap between the programs of Emmanuel Macron and Marine Le Pen.

Firstly, because there are measures in common in both programs: reduction of production tax, inheritance tax, abolition of the audiovisual license fee… Moreover, the amounts moved in each program are not colossal, few measures amount to tens of billions of euros .

The GDP Impact of Emmanuel Macron and Marine Le Pen's Programs.
The GDP Impact of Emmanuel Macron and Marine Le Pen’s Programs. © BFM Business

Looking at the medium term, Marine Le Pen is slightly outperforming Emmanuel Macron in terms of growth as she pursues a more stimulative demand policy, notably through its €12 billion VAT cut on petroleum products.

Slight advantage for Emmanuel Macron on employment with an unemployment rate that is 0.1 point lower. Slight advantage also on inflation and the trade deficit for the outgoing president.

The impact on unemployment of Emmanuel Macron and Marine Le Pen's programs.
The impact on unemployment of Emmanuel Macron and Marine Le Pen’s programs. © BFM Business

The only real difference is the public accounts, where Marine Le Pen pays the price for her demand policy.

The impact on the public accounts of the programs of Emmanuel Macron and Marine Le Pen.
The impact on the public accounts of the programs of Emmanuel Macron and Marine Le Pen. © BFM Business

In the medium and long term, in terms of impact on GDP, the curve is similar between the two candidates and then drops drastically for Marine Le Pen after the medium term. The National Rally candidate loses its lead, mainly because its policies weigh on the country’s competitiveness. There are measures for SMEs and VSEs in the program, but there is nothing for ETIs and large companies with measures designed to give a huge boost to our industrial competitiveness. This is not only noticeable in growth, but also in foreign trade.

Inflation and foreign trade

Marine Le Pen’s economic policies have also been more inflationary over time than Emmanuel Macron’s. But above all, the gap in the public accounts is widening: this gap is actually quite spectacular as Emmanuel Macron promises roughly 20 billion euros less in public finances, while Marine Le Pen increases them. †

The Inflation Impact of Emmanuel Macron and Marine Le Pen's Programs.
The Inflation Impact of Emmanuel Macron and Marine Le Pen’s Programs. © BFM Business
The Foreign Trade Impact of Emmanuel Macron and Marine Le Pen's Programs.
The Foreign Trade Impact of Emmanuel Macron and Marine Le Pen’s Programs. © BFM Business

Another interesting result: Marine Le Pen and Emmanuel Macron arrive at the same result on unemployment at the end of the five-year term – but not with the same labor market at all. There are said to be more people working in the labor market than Emmanuel Macron would have formed. The pension reform promised by the outgoing president would increase the size of the active population because people would work longer, so there would be more active people in the labor market and there would inevitably be a few more unemployed.

But there are still unknowns. Few are around Emmanuel Macron’s program as it is a continuation of his first five-year term. There are many more about Marine Le Pen’s program, about France’s place in Europe, about the reaction of the financial markets, investors to her election, and especially about the promises about government spending.

Emmanuel Lechypre with J. Br.

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