It looks like she did. The European Commission announced it intends to open the first excessive deficit procedure against France—coming at the worst time ever—11 days before the first round of the snap legislative elections that may become a nightmare for the French president.
The Commission can trigger an EDP to push member states to reduce deficits deemed too large. When this happens, targeted countries must develop reduction plans and deadlines— otherwise, they risk being fined.
France was not the only targeted country. The Commission also found Belgium, Italy, Hungary, Malta, Poland and Slovakia to be in breach of the deficit and debt ceilings set under the bloc’s fiscal rules. Romania was already in that club.
In follow-up, the Commission will propose its detailed recommendations for the affected countries in July. These will then need to be discussed, amended, and confirmed by the bloc’s 27 finance ministers by November.
In July, France may be in the throes of genuine political turmoil after the second electoral round on 7 July, and in November (the deadline for the European Semester, the EU’s annual fiscal exercise), the name of the prime minister could be Jordan Bardella, the new leader of the far-right Rassemblement national (RN).
It looks like the Commission’s decision – and its timing – plays into the hands of RN.
France has also overspent in the past, but the EU executive has so far made an effort to keep it off the hook. To be fair, the news of opening the procedure is not a surprise—we wrote back in September that such a development was looming.
But the EU institutions are political, the EPP is deeply entrenched in them, and despite the appearance of data-based decision-making, few believe their decisions are fair.
As a simple example, no one in Greece believes the country gets the same treatment regardless of whether the prime minister is the leftist Alexis Tsipras or the EPP’s Kyriakos Mitsotakis.
ETUC, the European Trade Union Confederation, issued a statement following the Commission’s announcement, calling it a “recipe for disaster” and denouncing “the lack of transparency around the EU’s approach to fiscal policy”.
This EU executive is known for playing with reports, both in terms of content and timing. The latest example is postponing the publication of a report criticising Italy for the decline in media freedom and judicial independence, as von der Leyen needs Prime Minister Giorgia Meloni’s support to secure a second term.
So did von der Leyen release this announcement because she is disappointed by Macron’s apparent lack of enthusiasm in backing her at the 17 June dinner?
We will refrain from embracing such a sensationalist explanation.
The announcement of the European Semester Spring Package had been expected before Macron dissolved the National Assembly. Had the Commission withheld the announcement, in theory, that could have inflicted Macron even more damage.
The problem in France is that voters need to decide between Macron’s status quo and the populists’ promises. At the same time, the last thing they want to hear is all that European jargon about excessive deficits and corrective measures.
Although successive French governments have let the public deficit slip in recent years – needing to deal with the fallout of the pandemic and then with inflation linked to the war in Ukraine – Gabriel Attal’s incumbent cabinet is still trying to position itself as a guarantor of a return to balance by 2027.
Conversely, the Rassemblement national risks triggering a mushrooming budget deficit. Bardella has called for a VAT cut on electricity, gas, and fuel from the current 20% to 5.5%— a move deemed to breach EU law, which may require negotiations with the European Commission to avoid the risk of fines.
According to the Montaigne Institute, Marine Le Pen’s presidential campaign programme would generate a shortfall of €100 billion per year.
The French need to realise that no matter how much they dislike Macron, the alternative is that their incomes plummet dramatically.
This is because the world is made in such a way. France needs to borrow on financial markets, and the costs may become prohibitive. Ask the Greeks what happened to their incomes when their country was treated like a pariah.
And another question is: How can this be explained to the electorate in the remaining few days before 30 June?
We don’t have an answer.
The Roundup
Outgoing Dutch Prime Minister Mark Rutte is set to become the next secretary-general of NATO as his main opponent, Romanian President Klaus Iohannis, removed himself from the race on Thursday.
The release of more than $1.1 billion to accelerate vaccine production in Africa was announced at the Global Forum on Vaccine Innovation and Sovereignty taking place in Paris on Thursday.
The five newly elected MEPs from the pan-European movement Volt have recommended that party members stay with the Greens’ group due to worries that the liberal Renew Europe group is too soft with member parties’ dealings with the far-right.
The German far-right AfD has set its eyes on creating its own parliamentary group, abandoning plans to seek readmission into the Identity and Democracy (ID) group in the European Parliament.
Newly elected as a Greens member of the European Parliament, outgoing Environment Commissioner Virginjius Sinkevičius is positioning himself as the bridge between his group and the centre-right European People’s Party (EPP), even though the latter has not taken the Greens into its alliance.
The European Conservatives and Reformists said they had leapfrogged the liberal Renew group to become the third-biggest political group in the European Parliament after welcoming new parties, but Hungary’s ruling Fidesz abandoned the idea of joining them.
To stay on top of the EU’s political rollercoaster following the elections, don’t miss this week’s EU Elections Decoded.
Look out for…
- Economic and Financial Affairs Council on Friday.
- Employment, Social Policy, Health and Consumer Affairs Council (Health) on Friday.
- High Representative Josep Borrell in Vienna, participates in panel discussion “Western Balkans EU Enlargement: Time to get real!” on Friday.
- Commission President Ursula von der Leyen attends strategic dialogue on the future of agriculture in Brussels on Friday.
Views are the author’s
[Edited by Zoran Radosavljevic/Alice Taylor]