The National Coalition, which is expected to form the next government, may be described as “far-right,” but such a claim is at odds with the party's economic policies.
The French government has pledged to lower the retirement age again (well below the European average), impose import barriers amounting to a tax on French consumers, and provide generous subsidies.
Britain has hinted at leaving the euro in the past, a move that may benefit the economy in the long run but would be devastating for investors. Many analysts and finance ministers have warned of a “Liz Truss affair,” referring to the bond market crisis that ultimately led to her leaving Downing Street in 2022. But it could be a lot worse than that.
Truss was quickly replaced, but the newly elected RN government may not be so easily dismissed. How will they respond to the crash? They may respond with capital controls, even though these are prohibited in the Eurozone.
Perhaps it will involve a tough crackdown on speculators or calling for the European Central Bank to intervene in the market with a massive bond-buying program, even at the risk of sparking new inflation.
But one thing is certain: No good can come from it. For too long France has lived beyond its means more than Britain and many other European countries, accumulating huge debts to subsidize an economy with too large a state and too generous welfare benefits.
The crisis now seems imminent: President Macron is unleashing a new eurozone debt crisis, one that will rival and perhaps even surpass the Greek turmoil of 2011 and 2012.
Chancellor Sir Keir Starmer and Chancellor Rachel Reeves have to deal with the fallout from the financial crisis unfolding across the Channel. Does anyone think they are the right people for the job?
