2022 Presidential Election: Marine Le Pen’s Economic Program (Still) Worries Economists

President-Did Marine Le Pen succeed in “demonizing” her economic program and making it more credible? Marine Le Pen ran for the second round of the presidential election by focusing her campaign on her purchasing power, “redistribution and social protection,” with 23.2% of the votes cast on April 10. I collected it.

However, the candidate’s economic and financial programs still attract major attacks from Macrony and criticism from the majority of economists. The latter point, this time in the media, is the risk of a thinly obscured “Brexit”, too expensive and poorly quantified, despite denying the withdrawal from the euro. It points out that it is a program that cannot manage finances and debts. When it simply does not violate the Constitution. Correspondingly, the candidate claims that her program is “working” and “balanced” at the budget level.

“Her program pushes us straight towards withdrawal from the European Union. Even if she no longer says so, it’s a form of” Frexit “in the budget,” he explains. HuffPost Economist Eric Heyer, a member of the High Council for Finance, and director of the analysis and forecasting department of OFCE (French Institute of Economics and Economics).

“For the rest, she makes social posts, but we’re actually in a liberal position because her tax system for VAT is relevant to all French people. They aren’t arrows, they’re aimed at those who need them most. This risk actually leads to a two-speed economy, because some people use them more or less than others. “Because,” he summarizes, also pointing out “ecological risks.”

Regarding pension reform, where is the guarantee of the seriousness of the budget?

This is the most visible economic gap between the two candidates. Marine Le Pen wants to return the statutory retirement age of French people who started working before the age of 20 to 60. In any case, for those who have verified at least 40 pensions. Meanwhile, since February she has been readjusted for everyone else. People who work between the ages of 20 and 24.5 are between the ages of 60 and three-quarters and 62, and may still retire at the legal age level. It doesn’t have to be full rate. The system will not change for others, especially those with choppy careers.

Therefore, many people will be affected by a reduction in the age at which they may be legally retired. According to Ministerial statistics, 70% of the first-quarter verifications were conducted at an average of 22.3 years in the age group born in 1982, now 40 years old. Candidates will also reindex inflation pensions and raise the minimum old age to € 1000.

“Candidates are proposing a return to the pre-2003 situation in terms of ageing and the number of quarters needed to get a full retirement,” said the Montagne study, which puts a very high cost on this reform. I will summarize the place. Liberal think tanks, said to be closer to employers, have reassessed the cost of this measure compared to RN encryption, increasing it from € 9.6 billion to € 26.5 billion annually.

“His pension plan, like some other candidate’s pension plans, isn’t specific enough to evaluate, but most importantly, the direction you want to go and the signals sent,” Eric said. Hayer answers. “Like Emmanuel Macron, Marine Le Pen promises new tax cuts, but to fund them, she cuts her contribution to the EU’s red line of 5 billion European budgets. I propose. “

To fund her reforms, the candidate also proposes to exclude foreigners from the social benefits or new savings of the budget allocated to a particular state agency. On the other hand, reform (very unpopular according to polls, Editor’s note) What was proposed by Emmanuel Macron can be easily quantified. Excluding unemployment and health insurance implications, raising the retirement age by one year now earns € 7 billion annually, “he continues.

“You can prioritize and tackle other possible resources, such as the fight against tax evasion. The problem is more difficult as you’ve earned $ 1 billion away from radar over the current five years. That’s bad. It’s far more indisputable at the budget level when pushing pension reform beyond political issues, “he adds. “This is also a way to give European partners and Germany a guarantee of budget control, even if a stability agreement is pending until 2023 due to the war between Covid and Ukraine.”

“Whatever the cost” about purchasing power is vague and not environmentally friendly

This is the backbone of her campaign and the axis of RN’s political and economic upturn since she took the lead. Marine Le Pen pretends to be a “purchasing power candidate”. To support her position, the candidate proposes to reduce the VAT of fuel from 20% to 5.5% and set the VAT of 100 so-called basic necessities food and sanitary products to 0%.

Candidates include “fruits and vegetables, salt, pepper, oil, bread, pasta, menstrual napkins, or baby diapers”, but there is no fixed list. Posted goal? She guarantees that as long as inflation exceeds 1%, she will “return French money” and avoid “middle class poverty” to fight inflation. Underestimated state funding? € 3.5 billion or € 4 billion annually, depending on the candidate to fund this tax gesture by imposing an additional fee on certain listed companies.

The proposal submitted shortly before the first round was requested by many Yellow Vests during the 2019 Great Debate. JDD, Calculated 11 billion and measurements for only 50 products. “Reducing VAT on baby diapers saves consumers at most 3 cents per pack, but it costs $ 240 million in finances,” he added.

In the EU, it was banned from reducing VAT to less than 5% until the end of 2021 to avoid littering between member states, even for food. However, by the 27th of the four-year discussion, a new directive signed on April 5th has made it possible to set discount rates on certain products on an ad hoc basis. “The problem is that gasoline, fuel oil, or gas is not included in this new directive because it pollutes the product. The biggest beneficiaries will be the biggest pollutants,” said Eric Hayer. I am.

Economists said, “Producers lower prices not because they lower VAT. For homes and vulnerable businesses that have no choice, more restrictive or targeted measures are needed (.. .) 90% of VAT reductions in catering in 2009 went to restaurants and their employees’ pockets, not customers, “he claims. Here is a survey conducted by the Institute of Public Policy in 2018.

Independent company Asterès estimates that a zero rate of 100 basic necessities will have a relatively modest impact on the French portfolio. That means 13 euros a year, per household, or “purchasing power increased by 0.3%”. This measure once again favors the people who buy the most.

There are no taxes for people under the age of 30, right?

This is another major tax system advocated by Marine Le Pen. This means that all French people under the age of 30 are exempt from income tax and discourage them from leaving the country. Therefore, the wealthiest people and traders like Kylian Mbappe, who earn more than € 2 million a month at PSG, will benefit from this measure. There is another big problem, candidates run the risk of being challenged by the Constitutional Council in the name of the principle of equality before taxes between citizens.

This equality is neither real nor absolute (for example, only 43% of French pay income tax), but accusations are admitted only for “general interests”. According to constitutionalists, his measures will have a “big chance” to be challenged. And one of them, Jean-Philippe de Rossier, explains to us that a referendum, especially on this issue, will not solve anything other than creating a “constitutional government.” If she takes power and wins the June legislative election, the legislative and economic path of the RN candidate is promised to be pitted.

See also HuffPost: Three Lessons from Round One