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French business bosses are rushing to build contacts with Marine Le Pen’s far-right after backing away from the rival left-wing alliance’s radical tax and spending agenda during the country’s snap parliamentary elections.
Four senior executives and bankers told the Financial Times that the left – according to opinion polls the strongest bloc competing 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 policy is more of a blank slate that the business community thinks they can help push in the right direction,” a Cac 40 business leader said of Le Pen’s party, which is ahead of other groups in the run-up to the two elections. voting round on June 30 and July 7. “The left is unlikely 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 in favor of the RN and that more would follow [President Emmanuel] Macron out, I wouldn’t have believed it.”
Both spoke anonymously for fear of publicly commenting on politics during the lightning parliamentary elections that Macron launched after his centrist alliance was crushed by the RN in the European Parliament elections.
Le Pen’s lieutenant Jordan Bardella, who is expected to become prime minister if the RN wins an outright majority, had already begun convincing business leaders in closed-door meetings in recent months, Paris investment bankers and executives said. He also attended industry conferences such as the Paris Air Show.
Jean-Philippe Tanguy, an RN MP who focuses on economic policy, said he was receiving calls from lobbyists, investors and companies eager to understand the party’s plans.
“We told them that the RN will keep budget deficits aside and present a credible plan,” he said. “The markets are going to be tough for us, so we really have no choice but to do that.”
Markets responded to the political uncertainty by sending the benchmark Cac 40 index down more than 5 percent between the election announcement just over a week ago and Monday’s close.
The spread between French and German government bond yields – a market barometer of the risk of holding French government bonds – has risen 0.31 percentage point since the election was called, the sharpest weekly move since the 2011 euro zone debt crisis.
Another high-level executive said the prospect of far-right or left-wing parties determining France’s economic strategy was “a choice between the plague and cholera.”
Both the far-right and the left-wing alliance New People’s Front (NFP) want a radical break with Macron’s business-friendly economic policies.
The president has cut production taxes for companies, made it easier for companies to lay off workers and pushed foreign companies including JPMorgan Chase, Pfizer and Amazon to invest in France. Unemployment has fallen and there has not been a recession like elsewhere in Europe.
But his government also vastly expanded government borrowing during the Covid-19 pandemic and the energy shock linked to the war in Ukraine.
The RN, which has yet to release a full economic programme, has indicated it could withdraw Macron’s main pension reform later this year after an audit of government accounts. It has made this a key campaign promise.
The party has said it will stick to its promises to cut value-added taxes on energy and fuel, which the government estimates will cost 16 billion euros. But in a sign of the far right’s attempts to reassure voters and markets, Bardella on Monday evening postponed a €7 billion VAT cut on household necessities. The RN also says it would give French companies priority in tenders, which is against EU competition rules.
Le Pen has tried to reassure the business community. “The financial markets do not really understand the National Rally project,” she told Le Figaro on Sunday. “They have only heard the caricature of our project. When they read about it, they think it’s reasonable.”
The left-wing NFP alliance has not made similar overtures. But it portrays its economic plans as more responsible because of billions of euros in planned tax increases to pay for the increased spending.
“We will finance this program by reaching into the pockets of those who can most afford it,” said Olivier Faure, head of the Socialist Party.
The NFP’s program includes scrapping Macron’s pension reforms, increasing salaries and social benefits in the public sector, raising the minimum wage by 14 percent and freezing the price of basic food and energy.
It would reintroduce a wealth tax, eliminate many tax breaks for the wealthy and raise income taxes on the highest earners.
Business leaders shy away from such ideas. “The left’s economic program is completely unacceptable and would lead France to abandon the capitalist system,” said one high-profile entrepreneur concerned about the election choice. “Bardella may look reassuring, but the far right is a threat to democracy, and not just to the economy.”
Additional reporting Ben Hall in Paris