Marine Le Pen, the right-wing two-time French Presidential candidate who is currently the subject of a criminal investigation, is threatening to block Prime Minister Michel Barnier’s budget in a move which risk toppling his government and triggering a full-blown Eurozone crisis.
And the EU’s former Chief Brexit negotiator has admitted his concern at the potential for a Greece-style budget crisis, warning: “Everything can explode.”
Ms Le Pen’s National Rally (RN) represents the largest far-right bloc in France’s political landscape, and a key opposition force against Prime Minister Michel Barnier’s centrist government.
RN’s nationalist stance is directly opposed to many of the European Union-friendly policies Mr Barnier champions, especially those tied to fiscal discipline and reforms aligned with EU directives.
And the 56-year-old could be about to flex her political muscles by blocking Mr Barnier’s fiscal blueprint, sending shockwaves through Europe and raising the spectre of a similar situation to that which saw Greece almost wreck the monetary union in 2009.
Mr Barnier’s shaky coalition government has only been in power for three months, and he is currently battling to put the nation on a firmer footing financially after high levels of public spending resulted in the country’s national deficit amounting to six % of its GDP – double that permitted by the EU.
Ms Le Pen – who spoke with Mr Barnier for an hour yesterday – told Politico afterwards: ““If the budget remains as it is, we’ll vote for no confidence.
“If the government collapses, the president of the Republic will have to choose a new prime minister.”
Under the French Fifth Republic, a government that cannot pass its budget is considered unable to govern effectively.
Such a scenario would likely compel Mr Barnier to either resign or dissolve the National Assembly, triggering early parliamentary elections.
Ms Le Pen could use this political crisis to galvanise her base, framing Mr Barnier’s inability to pass the budget as evidence of his administration’s incompetence.
If the budget impasse leads to a government collapse, France might struggle to meet EU fiscal guidelines.
Investors might the regard the stalemate as a sign of broader political instability, leading to reduced confidence in France’s ability to manage its public finances. Rising borrowing costs could exacerbate the country’s already significant debt burden, further straining its fiscal position.
Given France is a cornerstone of the Eurozone, and its financial troubles could have ripple effects throughout the bloc.
A loss of confidence in France’s economy could potentially lead to a devaluation of the euro and intensify economic pressures on other indebted Eurozone nations.
Comparisons with Greece’s crisis, while more severe for Greece itself, could become relevant if France’s situation was to snowball into a broader liquidity or solvency crisis.
Le Pen’s long-standing criticism of the EU and the euro could magnify these risks. A government led or heavily influenced by the RN might pursue policies that undermine EU cohesion, such as rejecting Brussels-imposed fiscal constraints or openly opposing Eurozone economic agreements.
The spectre of a so-called “Frexit” could re-emerge, causing further instability in financial markets and undermining the Eurozone’s integrity.
Interior Minister Bruno Retailleau acknowledged: “If tomorrow the government collapses over the budget, there will immediately be a financial crisis.
“Don’t think that France is shielded.”
Macron ally Gabriel Attal, the man forced to make way for Mr Barnier after the disastrous performance of his En Marche party in snap elections called earlier this year, said: “Marine Le Pen’s position is irresponsible.
“You can’t play heads or tails with the country’s future.”
Mr Barnier himself referred to the precariousness of the situation when addressing at an event organised by French business lobby Medef in Paris on Friday.
The 73-year-old said: “We have to respect eurozone rules because, otherwise when one of the countries doesn’t respect it – we saw what happened with Greece – everything can explode.”
