French PM Barnier announces concession in bid to end budget standoff

FRANCE 24 English

French Prime Minister Michel Barnier on Thursday announced a major concession in a bid to end a standoff with the opposition over the budget, which has caused jitters on financial markets and risks bringing down his minority government. FRANCE 24's Sharon Gaffney speaks to Renaud Foucart, Senior Lecturer in Economics at Lancaster University.  Visit our website: http://www.france24.com  Like us on Facebook: https://www.facebook.com/FRANCE24.English  Follow us on Twitter: https://twitter.com/France24_en

Transcript

00:00This is Apropos.

00:03Months of political tensions here in France may be coming to a head.

00:07The far right is threatening to bring down Michel Barnier's minority government in a

00:12no-confidence vote as a row simmers over the budget.

00:16Under pressure from Marine Le Pen, the Prime Minister has announced a major concession,

00:21scrapping plans to introduce a €3bn tax on electricity in a bid to end a stand-off

00:27with the opposition.

00:28Laurent Bristecker has the details.

00:32Hoping to steer France's minority government out of a deepening political crisis, French

00:38Prime Minister Michel Barnier agreed Thursday to scrap plans for an unpopular electricity

00:44tax hike.

00:45Far-right National Rally leader Jordan Bardella welcomed the move, but warned Barnier only

00:51had a few days left to make even more concessions or risk the government's collapse.

00:57The Macron administration and the opposition have for weeks been locked in a tense stand-off

01:02over proposed budget cuts, which the government says are necessary to bring down France's

01:07deficit, but which have been widely criticised by the left and the far right.

01:13France's left-wing parties, which were left out of the ruling coalition despite coming

01:18out on top in September's snap elections, said they would seek a motion of no-confidence

01:23if Barnier tried to force the budget through.

01:26Mr Barnier met with the presidents of the socialists but rejected all their proposals.

01:32So if the government tries to force the budget through, there will be a no-confidence motion

01:38and I will vote for it.

01:40The far-right, which now holds the key to the prime minister's survival, has sought

01:45to capitalise on this position of strength to wring out fresh concessions.

01:50It's threatened to support the motion of no-confidence if the government didn't do more to curb immigration

01:56and lower taxes.

01:58For more on the tense political situation here in France, we're joined by Renaud Foucault,

02:04senior lecturer in economics at Lancaster University in the UK.

02:09Good to have you with us on the programme this evening.

02:12Firstly, in your view, how much danger is Michel Barnier in here?

02:16At the moment, I think it's a very key point for him because Marine Le Pen is herself in

02:22a very difficult situation.

02:24We know that the government is a minority government that only exists because of the

02:29support of the far-right.

02:31But now, Marine Le Pen herself is threatened by a trial for embezzlement of public funds.

02:36So she might lose the right to run for the next presidential election.

02:40So she's now tempted to get as many concessions as possible because she knows that it's not

02:45such a bad outcome for her if the government falls, because then she will be at least in

02:49a position of opposition.

02:51And then on the left, which would be the alternative for Barnier, which would be to have some support

02:55from the centre-left, there have been some moves to try to make him alternative offers.

03:00But at the same time, they are still at the moment busy trying to cancel not only the

03:06pension reform of Emmanuel Macron, but their own pension reform of 2013.

03:10So there is no one who is ready at the moment to have a serious discussion on the budget.

03:16Michel Barnier had to cancel several of his moves to make his own party happy by cancelling

03:22some pension freezing, to make Emmanuel Macron's party happy by moving back on some of the

03:27tax breaks and to make Marine Le Pen happy by cancelling the electricity tax.

03:32So the budget, if it goes through, will already be a budget that is not very ambitious in

03:37bringing France back on track.

03:39And today, the cost of the debt for France is now higher than Greece, which might make

03:44them think twice.

03:45And when it comes to Marine Le Pen, you mentioned her earlier.

03:48She's on trial over charges of embezzlement.

03:50You say the best way for her to survive is probably going to be by voting against the

03:56government in a no-confidence motion.

03:59Is that what you're expecting to see here next week?

04:03If she gets a lot of concessions from Barnier, it will be very difficult for her because

04:07she went supporting the government by saying, we are the responsible party.

04:12But the problem is the trial where she's at the moment going to likely be convicted.

04:17It's not something she can easily claim is the deep states punishing her.

04:22It's something that has happened quite a few times in France.

04:24Alain Juppé was a former prime minister.

04:27He had to cancel his plans to become, to run for president for something similar.

04:32François Bayrou was a very close ally of Emmanuel Macron, justice minister.

04:36His entire career was cancelled for something similar.

04:39Nicolas Sarkozy has been convicted to firm jail sentence for something relatively similar

04:45of taking money from his party to run a political campaign.

04:49So if she wants to have a strong claim that she's pursued by a deep state, she cannot

04:54be at the same time supporting the government.

04:56But no, Barnier is giving her a lot.

04:59Barnier is giving her this cancellation of energy tax.

05:02He's trying to move on something which is very contentious, which is support for medical

05:07aid for migrants.

05:08If he actually goes cancelling that, this is something very dangerous because this means

05:12that against pandemic, against contaminated diseases, there will be less protection simply

05:17because they would stop treating foreigners.

05:20But those are the kind of thing that at the moment he's giving because he really, really

05:24tries to keep this coalition with the far right alive.

05:28And do you expect to see further concessions over the weekend before that potential vote

05:33next week?

05:34For example, Jordan Bardella tweeting about how they want a moratorium on the creation

05:40of new taxes and tax increases generally, the far right also seeking an increase in

05:45state pensions.

05:46So do you think that Barnier is going to move further over the weekend?

05:51He will try to give the far right some more minutes, but those are kind of difficult because

05:56in the end, the only reason why Barnier is there is to bring France back on track for

06:01the budget.

06:02If everything he does is to throw more money at the problems, he's not solving anything.

06:07And if France has a financial collapse, even though the government survives, it's not particularly

06:12useful to him.

06:13So he might give them something, but maybe on other issues like on proportional representation

06:18or some tough discourse about migration, but giving increasing pensions today when the

06:24main problem of France is that so much money is taken by pensions, in particular by wealthy

06:29pensioners receiving state pensions, I think this would be another kind of suicide for

06:34him.

06:35Maybe the government wouldn't collapse, but the French economic situation would collapse.

06:40What does happen, though, if the government does collapse?

06:43Fresh elections can't be called until next summer at the earliest.

06:47Exactly.

06:48So there is no way to get an election now.

06:50So what would happen is that Macron would need to do what he hasn't done yet.

06:54And the centre-left would need to do the same, which is to talk to each other and try to

06:59find a way forward.

07:00So the crazy thing is that the result of the election was quite clear.

07:04It was not a victory of the left.

07:06It was not a victory of the centre.

07:07It was a victory of the Republican Front, everyone who decided to go together to block

07:13the far-right government.

07:15Michel Barnier, the prime minister, his party was not part of that.

07:18So it's really the socialist, the green, the centrist, and it could be the far-left, but

07:22they don't want to be part of that.

07:24But the problem is that right now there has been no attempt to really build that kind

07:29of coalition, which would be much more legitimate.

07:32So if the government falls, they would have to try to do that.

07:35But this means also that the left, who has been very slowly rebuilding, would have to

07:39accept to take responsibility for an extremely difficult budget situation.

07:44And coming back after a few years of slowly rebuilding and having as a first move to have

07:49to cut spending and raise tax, it's not something you want to do spontaneously as a party.

07:55And you mentioned the French president there.

07:57Will he come under a lot of pressure to resign if the government does in fact fall?

08:01We saw a poll this week saying that that is what two in three voters want, if that is

08:07to be what happens next week or in the coming weeks.

08:11Yeah, but there were similar polls before the last presidential election, and it still

08:16won't hit handsomely, because the question is that there is no particular alternative.

08:20If there was an election tomorrow, OK, maybe Le Pen would win, but maybe she might not

08:25be able to run anyway.

08:27But Macron as a president is not in charge of the government.

08:31There has been an election, there has been a result of that election.

08:35And the people who are now in parliament have one chance to show that parliamentary democracy

08:40can work.

08:41Macron resigning wouldn't change anything to that.

08:43And I don't think any reason for him to try to do that now.

08:48And when it comes to Michel Barnier, there's been a lot of talk as well about perhaps he's

08:51thinking about implementing the controversial Article 49.3 if it comes to it.

08:58We saw the previous government do that various times, particularly when it came to that very

09:02controversial pension reform.

09:05Do you think that Barnier is going to end up going down this path?

09:10He will most likely have to do that because the way the law has been amended and reamended

09:16and going through Senate and back, he has to go through that procedure.

09:20And that's why there will be next week a no confidence vote.

09:23So until that, the suspense is, will he give so much to Marine Le Pen that she cannot vote

09:29the no confidence and has to support him or will a no confidence vote go through?

09:34And if the no confidence vote goes through for Marine Le Pen, it means that she most

09:38likely will lead to a centre left government.

09:42And opposition figures, they've been arguing this week that in the event that the government

09:46does collapse, it could still present special laws to levy taxes.

09:52For example, in the new year, they could renew spending by decree to ensure that the country

09:58keeps moving, keeps working, that public servants are able to be paid.

10:02Is that something that is possible, do you believe?

10:06It is possible.

10:07It will depend by how much the financial markets panic.

10:10So one of the main example of what could happen is that if the government falls, the own member

10:15of parliament might lose their salary because the budget will not allow to pay them.

10:19But if there is a quick panic on the financial markets, and we are not very far away from

10:24that at the moment, if there is a panic in financial markets, you will see people moving

10:29very quickly because no one wants to be responsible for a collapse of the French economy.

10:34And I think there is a way for the French, even if the government falls, to stay resilient

10:38with that.

10:39But they would need to find eventually some form of majority of responsibility in parliament.

10:45And if it's not with the far right, it has to be with someone else.

10:48And it really though isn't in any party's interest to bring down the government at this

10:52point though, is it?

10:55Somehow maybe the far left dreams of the government falling to show themselves as the only alternative.

11:01Maybe somehow it's such a crazy moment for Marine Le Pen.

11:04Imagine the party is there for 50 years, for 50 years, it's her father and her keeping

11:09the tradition of running at every single presidential election and seeking power.

11:14And now they could touch it with their finger.

11:16It might be somebody else, Jordan Bardella, who get the job and maybe will betray her.

11:20So those people are maybe instead of panic and might try to make it fall.

11:26But all the others, the party of Michel Barnier, they are tiny in representation.

11:30They've never had so much power.

11:32There's no reason for it to fall.

11:34The centrists of Macron are in a very delicate situation.

11:37They were saved by miracle by the Republican front.

11:40The Socialist Party, the Green, they had very, very good results in the last election and

11:44they might lose everything if there is an election in a few months.

11:48So for them, there is a very strong incentive to continue.

11:51But they need to find a way to do that while not being completely unpopular, despite, again,

11:56the budgetary situation being very, very difficult.

12:00Either way, we're in for an interesting few months.

12:02Renaud, thank you so much for joining us.

12:04That's Renaud Foucault, Senior Lecturer in Economics at Lancaster University.

12:09Well, that's it from us for now.

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