In France, Far-Right Le Pen Bets on 'Economic Patriotism'
Assistant Editor, CNBC.com
As Nicolas Sarkozy and François Hollande race for victory in the French presidential elections, the leader of the country's far right National Front - currently forecast to come third in the race - has a tough fight on her hands.
Under the banner of "economic patriotism", Marine Le Pen has moved her party away from its anti-immigration stance to focus on the economy, and in particular on unemploymentand the European Union.
Economic patriotism, she said at a press conference on Tuesday, “is the only way to revive employment without the inhumane austerity measures” that other European countries have had to face.
Unlike her more established opponents, Le Pen rejects what she calls a "poisonous ultra-liberal potion”, referring to free trade and free movement across the EU's borders.
Le Pen argues she is only candidate to promote both "made in France" and "buy French" protectionism and has campaigned against EU free trade. She has called for a 3 percent tax on all imports in order, she says, to end the disparity between how France treats other economies and how it is treated in return.
Besides blaming ultra-liberal policies, Le Pen largely blames the European Union and the euro zone for the current sovereign debt crisis.
“I want to exit the current economic model,” she said on Tuesday, “to exit the constraints that have been imposed upon us.”
Le Pen is confident about her ability to renegotiate the terms of the euro treaty. “If dialogue doesn’t work, there will be an implosion of the euro zone,” she said.
“We need to stop the (European) bailout plans,” she said, “as their sole purpose is to buy us some time, not to solve anything.”
“We are in the same boat as Greece, Portugal and Spain,” she said. “Not at the same level yet, but almost since the same causes will lead to the same consequences,” she added.
Tackling the Debt by Exiting the Euro
In order to fund her program and avoid skyrocketing France's debt levels, Le Pen plans on cutting what she calls “bad costs.”
“There is the cost of immigration, which is considerable,” Le Pen said. She also cited the cost of being a member of the European Union, and national benefit fraud, which she said costs the state as much as 20 billion euros a year.
In addition to these cost cuts, Le Pen also wants to reform the the way France funds its debts.
“We have given 1,400 billion euros to the financial markets and banks since 1973,” she said, when a law forcing the French government to turn to financial markets to borrow moneycame into force. “We have 1,700 billion euros in debt," she said.
According to Le Pen, this means that a major part of France's wealth has gone to interest payments.
Her solution would be to overturn this law and allow the French central bank to lend money to the French treasury through a monetizationof the debt for as much as 100 billion euros a year.
Along with giving power back to France's central bank, France would abandon the euro.
“It is a mad, endless and deadly spiral that we are accepting. So yes, I do believe that our countries will be much better off without the euro than with the euro.”
“The euro ,” she said, “is a currency that is way too strong for our economies…We cannot be competitive with a currency between $1.30 and $1.40,” she added.
Under Le Pen, France would return to the French franc, or keep the euro, not a the single currency, but rather as a common currency. Under such a scenario, countries would retain control of monetary policy and their central banks would set interest rates.
Fiscal reforms are also necessary in order to balance the French budget, according to Le Pen.
She wants to simplify the existing French corporate tax system which she says “creates tax uncertainty” and is “an obstacle to foreign investments”.
For those in employment in France, she wants a progressive income tax up to 46 percent for the highest earners.
Her socialist opponent, François Hollande has called for 75 percent taxon those earnings more than 1 million euros a year, and the extreme-left anti-capitalist candidate, Jean-Luc Melenchon for a 100 percent tax on revenues higher than 360,000 euros.