What the New Popular Front thinks: “State at the center”, “massive increase in salaries” and wealth tax to tax “billionaires”
The coalition of left-wing parties Nova Frente Popular promises a “massive” increase in wages to reactivate the economy through consumption.
According to the NFP, the current French executive “failed” and the proof it presented was the fact that the Government “was sanctioned by the rating agencies”, which began to lower the public debt rating due to the high level deficit (5.5% of Gross Domestic Product in 2023), and also by the European Commission, which on Wednesday opened an excessive deficit procedure against France, similar to the what happened to other member countries.
In contrast to Macron’s strategy, the New Popular Front’s intention is to “put the State at the center of the economy†and that this will be responsible for “dragging the whole” of all sectors.
The objective is “a Keynesian relaunch”, a theory that argues that the State should intervene in the economy whenever necessary, which would be based “on a massive wage recovery”, said Vallaud, before explain to businesspeople gathered in an exhibition hall in the center of Paris that increased consumption would lead to an increase in their companies’ order books.
One of the central points of the New Popular Front program, and one of the most criticized by employers, is precisely the increase in the minimum wage to 1,600 euros net per month (it is currently almost 1,400 euros) and the indexation of wages to inflation.
The NFP guarantees that it will compensate for the additional costs that this measure will have for Small and Medium-sized Enterprises (SMEs) with public aid, also proposing “social and environmental protectionism at Europe’s borders†to protect production is from imports.
Éric Coquerel, who represents the most radical wing of the New Popular Front, also tried to calm the great concern that employers showed in relation to his proposals, stating that they do not contemplate ” a deficit explosion” because a large part of the increase in spending would be financed by higher economic growth.
However, the LFI deputy said that they intend to “discuss” the rule of a maximum deficit limit of 3% of Gross Domestic Product (GDP), established by the European Union (EU) Stability Pact, and although they exclude France’s exit from the euro zone, they intend to renegotiate these agreements, making use of the strength and influence of Paris, one of the main drivers of the European bloc’s economy.
In this regard, he highlighted that the President of the United States of America, Joe Biden, forgot the urgency of reducing the public deficit, placing it behind other priorities, such as the IRA massive aid program to production and the decarbonization of the economy.
Regarding the tax increases that the left-wing coalition has planned to partially offset the increase in public spending, Boris Vallaud said that the crucial effort will not have to be made by companies, but by the richest, with the reestablishment of the so-called Wealth Tax (ISF), which may have a rate of 1-2%. For the NFP, this measure will serve to correct the current situation in which “the middle class pays the taxes that billionaires do not pay”.
*Article edited and updated
