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December 2, 2024 - 10:00am
France is on the brink. Days after the yields on French bonds rose above those on Greek bonds, it now appears that the government might collapse. Rassemblement National’s President, Jordan Bardella, said that his party is prepared to support a no-confidence motion against Prime Minister Michel Barnier. At issue are pensions, with the government trying to impose de facto cuts by removing inflation indexation while Marine Le Pen’s party stands in opposition.
The real problem is that the Macron government has driven France toward bankruptcy. When Macron was first elected in 2017, he was portrayed as the solution to France’s and Europe’s problems, with the Economist famously heralding him as “Europe’s Saviour”. Macron was said to be an intelligent technocrat with a background in banking who could reform the French state and bolster the French economy.
Fast forward seven years and his policies, together with his cynical attempts to keep himself in power, are threatening to drive France’s Fifth Republic off a cliff. When Macron took power, government debt was around 98.5% of GDP. In 2023, it hit 110.6%. In 2017, France was running a budget deficit of around 3.4% of GDP while in 2023 this had risen to 5.5% of GDP.
There were two key drivers of this runaway spending. The first was the lockdowns imposed in response to the Covid-19 pandemic. In 2020, when the pandemic broke out, France’s deficit hit an eye-watering 8.9% of GDP. In the wake of the Ukraine war, France has been forced to engage in enormous energy subsidies, due to the sanctions imposed on Russia. The French Finance Ministry estimates that the subsidies cost around €45 billion in 2023. This amounts to 1.9% of GDP and explains most of the increase in the French deficit.
Curiously, Macron seems to want to pile on even more pressure on the state’s finances in furtherance of the war in Ukraine. In November, as French bond yields were rising, Macron gave the green light to allow French Scalp missiles to strike long-range targets inside Russia. Knowing that this would provoke a Russian response, the French Foreign Minister then gave signals that started a discussion of sending troops to Ukraine. It seems obvious that if France got directly involved in the war, the bond markets would panic, and the country would go bankrupt immediately.
What explains Macron’s strange behaviour? It appears that as he becomes increasingly isolated at home, and with his project for domestic reform crashing against the rocks, he has tried to recreate himself as an international statesman. This week, with the government near dissolution amid a fiscal crisis, the French President is heading to Saudi Arabia to try to get France more involved in the Middle East. These actions suggest that Macron was never the level-headed technocrat he was made out to be; rather, he appears to be a politician willing to take big gambles to try to bolster his own importance and secure his own legacy.
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SubscribePerfect summation of Macron the confabulist.
Pilkington’s contributions to this magazine just keep getting better.
Which planet does he look like now?
M. Macron exhibits a curious form of psychological disposition related to “Napoleon Complex” or “Napoleon Syndrome”. I wonder if Macron looks in the mirror and asks himself “What would Napoleon do?” and then formulates his policy accordingly.
A narcissistic megalomaniac with a Messiah complex.
France: don’t like this Republic? We have others…
France leads the way into welfare -state bankruptcy as other Western countries follow.