France’s corporate bosses are racing to build contacts with Marine Le Pen’s far right after recoiling from the radical tax-and-spend agenda of the rival leftwing alliance in the country’s snap parliamentary elections.
Four senior executives and bankers told the Financial Times that the left — which polls suggest is the strongest bloc vying with Le Pen — would be even worse for business than the Rassemblement National’s unfunded tax cuts and anti-immigration policies.
“The RN’s economic policies are more of a blank slate that business thinks they can help push in the right direction,” a Cac 40 corporate leader said of Le Pen’s party, which is ahead of other groupings in the run-up to the two-round vote on June 30 and July 7. “The left is not likely to water down its hardline anti-capitalist agenda.”
Another major business leader and investor in France added: “If you had told me two weeks ago that the business world would be rooting for the RN and counting [President Emmanuel] Macron out, I would not have believed it.”
Both spoke anonymously out of fear of commenting publicly on politics during the lightning legislative election campaign triggered by Macron after his centrist alliance was crushed in European parliament elections by the RN.
Le Pen’s lieutenant Jordan Bardella, who is expected to be prime minister if the RN wins an outright majority, had already begun to woo business leaders in closed-door meetings in recent months, said investment bankers in Paris and executives.
Jean-Philippe Tanguy, an RN MP who works on economic policy, said he had been getting calls from lobbyists, investors and companies eager to understand the party’s plans.
“We’ve told them that the RN will hold the line on deficits and present a credible plan,” he said. “The markets will be severe on us, so we really have no choice but to do so.”
Markets responded to the political uncertainty by sending the blue-chip Cac 40 index down more than 5 per cent between the announcement of the elections just over a week ago and Monday’s close.
The spread between benchmark French and German bond yields — a market barometer for the risk of holding France’s debt — has risen 0.31 percentage points since the election was called in the sharpest weekly move since the Eurozone debt crisis in 2011.
Another high-level executive said the prospect of either far-right or leftwing parties setting France’s economic strategy was “a choice between the plague and cholera”.
Both the far right and the leftwing New Popular Front (NFP) alliance want a radical break with Macron’s business-friendly economic policies.
The president has cut production taxes on corporations, made it easier for companies to fire workers and wooed foreign companies, including JPMorgan Chase, Pfizer and Amazon, to invest in France. Unemployment has fallen and recession has not set in as elsewhere in Europe.
But his government has also hugely expanded public borrowing during the Covid-19 pandemic and the energy shock linked to the war in Ukraine.
The RN, which has not issued a full economic programme, has signalled it could revoke Macron’s flagship pensions reform later in the year after an audit of public accounts. It has made this a key campaign promise.
The party has said it will keep its promises to cut value added tax on energy and fuel, which the government says will cost €16bn. But in a sign of the far-right’s attempts to reassure voters and the markets, Bardella on Monday night postponed a €7bn VAT cut on household necessities. The RN also says it would give French companies preference in procurement, a violation of EU competition rules.
Le Pen has sought to reassure business. “Financial markets don’t really understand the National Rally’s project,” she told Le Figaro on Sunday. “They have only heard the caricature of our project. When they read about it, they find it rather reasonable.”
The leftwing NFP alliance has not made similar overtures. But it depicts its economic plans as more responsible because of billions of euros in planned tax rises to pay for the increased spending.
“We will finance this programme by dipping into the pockets of those who can most afford it,” said Olivier Faure, head of the Socialist party.
The NFP’s programme includes scrapping Macron’s pension reforms, increasing public sector salaries and welfare benefits, while raising the minimum wage by 14 per cent and freezing the price of basic food items and energy.
It would reintroduce a wealth tax, scrap many tax breaks for the better-off and raise income tax for the highest earners.
Corporate bosses recoil at such ideas. “The left’s economic programme is totally unacceptable and would amount to France leaving the capitalist system,” said a high-profile entrepreneur anguished over the choice in the election. “Bardella may look reassuring but the far right represents a threat to democracy, not only the economy.”
Others are more sanguine. Matthieu Pigasse, an investment banker at Centerview who specialises in sovereign debt advisory, said the French economy was “protected by the euro” and the EU itself, even if the Eurosceptic RN has long criticised them.
“In a historical irony, the euro will immunise [the economic impact] from the left or the far-right,” he told L’Express magazine.
Additional reporting Ben Hall in Paris
