I did not expect National Rally to win a majority, but nor did I expect a third place finish. This is a terrible outcome for both Macron and France.
The Guardian reports Exit Poll Shows Shock Win for Left-Green Alliance
The polls are closed in France and the first projections have been published.
France’s national assembly has 577 seats, with 289 seats needed for an absolute majority.
Here is the first projected seat distribution, from Ipsos. It shows the left in the lead, in a major shift compared to opinion polls during the campaign.
Left-green New Popular Front: 172-192 seats
Emmanuel Macron’s allies: 150-170 seats
Far right National Rally and allies: 132-152 seats
What Happened?
The short answer is the center and left colluded to stop the right, as normally happens.
The long answer is France has a two-stage election where any party that gets 12.5 percent of the vote makes it to round two unless someone wins an outright majority in round one.
As typical in France, all but the lead or second place party drop out of the election so the Right faces a single opposition candidate.
Success for Macron?
This was no victory for Macron who called snap elections. Macron’s Ensemble coalition currently has 249 members of the National Assembly.
After this “win” Ensemble will have 150-170 seats.
Macron will come to regret the elections.
I discussed this in advance so all I have to do is copy what I said on June 30: President Macron’s Party Blown Out in First Round of French Parliament Elections
Given Marine Le Pen’s priority is to become the next president of France, National Rally will be in a better position if it falls short and Jordan Bardella is not the next prime minister.
Debt brakes explain why.
The EU has launched an Excessive Debt Proceeding against France.
In addition to the Excessive Debt Proceedings against many countries, every EU county has defense spending issues, climate spending issues, and demographic issues.
Be Careful of What You Wish
If National Rally achieves an outright majority, Jordan Bardella will emerge as Prime Minister.
Then what? The EU will immediately enforce debt and deficit rules it let France ignore for decades.
Debt Proceedings
Please note the EU Rebukes France, Italy and Others Over Excessive Debt.
The assessments of the 27 EU states’ budgets and economies will be published by the European Commission on Wednesday, with France, Italy and Belgium among the member states to be reprimanded over their accumulated excessive new debt.
The Commission said it was satisfied that “the opening of a deficit-based excessive deficit procedure is warranted” in the case of seven countries. The group also included Hungary, Malta, Poland and Slovakia.
The EU suspended debt and deficit regulations to help countries cope with the economic fallout of the COVID-19 pandemic and Russia’s invasion of Ukraine.
The rules are now back in place and now any EU country going over debt and deficit limits run the risk of legal action.
Debt Brakes and Treaty Requirements
For additional details and discussion, please see Debt Brakes and Treaty Requirements About to Smash the EU.
Hoot of the Day
To achieve a government debt-to-GDP ratio of 60 percent, EU countries will have to reduce spending or raise taxes by 2 percent of GDP, on average, every year for 46 years.
That also presumes no recessions or other emergencies in that timeframe. And this is supposed to be a serious proposal.
Let’s just say it’s not going to happen. But these clowns are likely to try, if for no other reason than punish Le Pen.
Long Term Fiscal Issues
In addition to the Excessive Debt Proceedings against many countries, every EU county has defense spending issues, climate spending issues, and demographic issues as shown in the following chart.
The above chart is from the ECB report Longer-Term Challenges for Fiscal Policy in the Euro Area
In the future, various longer-term challenges are likely to exert pressure on public finances in the euro area. On top of the existing fiscal burdens – as reflected in the high debt ratios in a number of euro area countries, which were exacerbated by the pandemic and the subsequent energy crisis – there are several important longer-term challenges for fiscal dynamics. This article starts by reviewing some of the most important challenges and discussing their fiscal relevance, with a focus on demographic ageing (Section 2), the end of the “peace dividend” (Section 3), digitalisation (Section 4) and climate change (Section 5). Acknowledging the uncertainties surrounding any quantification of these challenges, Section 6 then presents some tentative – purely indicative – estimates of the additional fiscal effort that could be required to ensure the long-term sustainability of public finances in the presence of such developments. The implications of digitalisation are excluded from that exercise, given the particular uncertainty that surrounds their quantification. Section 7 then provides some concluding remarks.
Hoot of the Day – Far Left Goals
The Front’s programme includes scrapping the 2023 French pension reform law, lowering the retirement age, increasing public sector salaries and welfare benefits, raising the minimum wage by 14 percent, and freezing the price of basic food items and energy.
Price Controls! 14 Percent Wage Hikes! Mercy!!!
In four words, I can describe the actual result of Macron’s “success” at keeping the Right out of power.
France is Now Ungovernable
By refusing to cooperate with the Right, Macron instead has to cooperate with a Far Left plurality described above including Green policy that spawned the Yellow-Vest Protests that rocked Macron for months.
Addendum
Goof luck President. Oh, I almost forgot – Congratulations.