France votes over two rounds on June 30 and July 7 in a snap parliamentary election called by President Macron after his party suffered a heavy defeat in the June EU Assembly elections. France has two rounds of voting: if a candidate gets 50% of more in the first round, he or she is elected. If not, then in the second round, the top two candidates fight it out. A survey released by pollster IFOP found the National Rally (NR) leading all other parties with the support of 35% of voters. The New Popular Front (NFP), a leftist alliance of socialists, communists and greens, came in second with 30% and President Macron’s centrist Ensemble was third with 20%.
If those results hold, no party will amass enough votes to meet the 289-seat threshold for an absolute majority in the 577-seat lower chamber, the National Assembly. Macron’s party is already governing without a majority after its poorer-than-expected showing in the last 2022 legislative elections, forcing it either to seek out coalitions to pass legislation or use a presidential edict to bypass the Assembly without a vote.
Under France’s constitution set up by President de Gaulle in the late 1950s, Article 8 says the president appoints the prime minister. Macron would be expected to offer the job to the leading parliamentary group. But as that is likely to be the National Rally, Macron may seek to form a coalition of other parties. Actually, the NR party leader Jordan Bardella has said that he would not accept being prime minister if his party does not get an outright majority.
So the scene is set for either paralysis or possibly a financial crisis as foreign investors and French big business run for cover if the NR should gain an outright majority. The Financial Times is worried. “At best, a parliament dominated by the political extremes would plunge France into a period of prolonged instability. At worst, it would lead to the adoption of spendthrift and nationalistic policies that would swiftly provoke an economic and social crisis in France.”
Basically, France is split three ways politically. One-third backs a pro-EU, pro-capitalist France as represented by the ‘centrist’ Macron; one-third backs a nationalist, anti-EU, anti-immigration France as represented by Le Pen’s NR; and one-third backs a socialist pro-labour France as represented by Melenchon and the newly formed NFP.
France is a key G7 economy, now the seventh largest in the world with 68m people, representing around one-fifth of the Euro area GDP. But its former imperialist global past has been reduced to exerting control over French-speaking West Africa (that dominance is now seriously under threat) and trying to control the EU in alliance with Germany.
In manufacturing, France is one of the global leaders in the automotive, aerospace and railway sectors as well as in cosmetics and luxury goods. It has a highly educated labour force and the highest number of science graduates per thousand workers in Europe. Its services sector is large, led by tourism (France has the largest number of tourist visits in the world) and financial services. Additionally, France is one of the world’s largest exporters of farm and agricultural products and is renowned for its wine, spirits and cheeses. The French government provides significant subsidies to this sector and France is the largest exporter of farm products in Europe. France is linked closely to its largest trading partner, Germany, which accounts for more than 17% of France’s exports and 19% of total imports.
Similar to many western European nations, France has experienced poor real GDP growth. Annual real GDP growth has been steadily falling over the last 40 years. And now in the 2020s, it has virtually ground to a halt.
The French economy has followed the same pattern as the other G7 economies in the 21st century: slowing economic growth in the 2000s, then the Great Recession, followed by even weaker growth in the 2010s, along with slowing investment growth and stagnating productivity. The investment to GDP ratio has been volatile, falling sharply in successive recessions, but currently suffering a record fall.
Slowing productive investment growth generally leads to stagnating labour productivity and France is increasingly affected. Indeed, total factor productivity (a measure of the impact of ‘innovation’) is now falling absolutely.
As always, behind this relative stagnation lies the falling profitability of capital. French capital’s profitability started to decline sharply at the beginning of the 21st century (the advent of the euro) and gathered pace after the Great Recession. My calculations suggest that average profitability is now at an all-time low after a fall during the COVID pandemic slump.
Source: Basu-Wasner, EU AMECO, author’s calcualtions
No wonder corporate bankruptcies are rising fast since the pandemic.
Manufacturing continues to contract. The HCOB France Manufacturing PMI fell to 45.3 in June 2024 from 46.4 in the previous month (a score of 50 means stagnation). This marked the 17th consecutive month of contraction in France’s factory activity,
Even the Banque de France in its latest report had to admit that “economic activity in France is set to remain subdued in 2024 (0.7% annual growth) after a significant slowdown in the second half of 2023.” Poor productivity growth and high inflation has meant that real wage earnings have fallen – again as in many other G7 economies. Average real wages are still nearly 3% below 2019 levels.
Source: OECD
And employment growth has stopped.
Banque de France admits that in 2024 “business investment is likely to be penalised by relatively sluggish activity, as well as by financing costs and lending conditions.” The BdF mentions the geopolitical disaster that the Ukraine war has meant for France (and even more for Germany), which has kept inflation rates up and GDP growth down. It even expects a larger slowdown in nominal wages than it expected at the start of 2024 and “we cannot rule out the possibility of another downward surprise on business productivity, which could reinforce the dynamics of unit wage costs and give rise to additional inflationary pressure.”
The decline in average real incomes in the last four years only adds to the inequality of incomes and wealth in France. Although inequalities of income and wealth in France are not nearly so extreme as in the US, they are still grotesque. Indeed, inequality has worsened in the last 40 years. In 1983, the top 1% of income earners took 7.5% of all personal income, 10% took 30% and the bottom 50% received just 21.4%. By 2022, the top 1% took 12.7% (an over 60% increase), while the top 10% share rose to 34.8% and the bottom 50% share fell to 20.3%.
Inequality of wealth (net personal wealth) is, as usual in all major economies, much worse. In 1983 the top 1% of wealth holders owned 15.9% of all personal wealth in France, the top 10% had 50% and the bottom 50% held just 8.9%. By 2022, those inequalities got even worse. The top 1% of wealth holders now had 24% (over a 60% increase), the top 10% now owned 57.7% and the bottom 50% saw their share of personal wealth fall to just 5.1% (a 48% decline).
Source: World Inequality Lab
In its latest report, the Observatoire des Inégalités paints a picture of a country where gaps in income levels and living standards between the most affluent and the least affluent are widening. The minimum living standard gap of the richest 10% has remained around 3.28 times higher than the maximum living standard of the poorest 10%.
This weekend election is not for the presidency, which remains the most powerful force in the constitution. Emmanuel Macron is in that office until May 2027. The National Assembly has limited powers, although the government and Assembly does set the budget and direct economic policy. But given what has happened to living standards and public services in France under successive governments, no wonder enthusiasm for the Assembly elections has waned.
In 2018, the voter turnout was less than 50% for the first time, compared to a near 65% in early 2000s. National Rally may become the biggest party in the Assembly after the weekend, but the real winner will be the No vote party.
If National Rally gains an outright majority, this will probably spook financial markets for a while. That’s because what worries big business and the financial sector is ‘uncontrolled’ government spending and rising public debt. National Rally plans to help (small) business with lower taxes. NR would cut the pension age back to 60 years, reversing Macron’s recent forced rise to 64 years. NR claims it will increase benefits to the old and to children, while keeping the working week at 35 hours and overtime tax-free!
NR’s economic policy is thus anathema to French capital and attractive to French labour, but it is combined with racist and nationalist measures. Muslims and other immigrants would lose rights to work in various public posts and their relatives could deported. NR leader Bardella says that immigrants have nothing to fear from his government “as long as they behave themselves”.
Big business is hoping that NR will be tamed in government and by the threat of ‘market discipline’ as debt costs rise. They look to a repeat of the very acceptable role adopted by Italy’s’ ‘hard right’ PM Meloni, who has fitted nicely into all the policies of EU Commission and NATO. In practice, under the NR, there will be no real attack on the hegemony of French big business. NR policies in a capitalist France with its low growth and profitability are utopian. Neither the needs of labour nor capital will be met.
When we turn to the NFP, we find a similar utopianism, even if it is trying to promote the interests of labour over capital. Its economic program is a 100-billion-euro economic stimulus plan funded by government borrowing and some nationalisation in sectors such as the motorway network. The NFP would increase public spending, raise minimum and public sector wages, freeze prices of key essentials, increase taxes on the wealthy, create jobs to reduce the unemployment rate to 6% and also, like the NR, cut the retirement age to 60. But big business and finance do not want government spending to rise. For them, austerity is necessary. You see, the French government budget deficit is widening.
And this is driving up government debt to exceed the agreed limits under Eurozone fiscal rules.
This must be stopped. But what the economic apologists for French capital ignore is why the government deficits and debt have risen. It is not because of ‘excessive’ government spending on welfare and benefits etc; it is because France, like other G7 economies has suffered a series of financial crashes and slumps so that the public sector has had to bail out the private sector. And slow growth in output, investment and incomes has reduced tax revenues and increased public spending relative to GDP. The solution is not austerity but planned public investment through control of the strategic sectors of the French economy to increase output, investment and incomes.
But such policies would be very frightening for French capital. So it will opt for the racist NR government over the leftist NFP – no surprise there. Take the view of Olivier Blanchard, a French mainstream economist and former chief at the IMF. Both the NR and Left programs are bad news, but for him it is the program of the NFP that is worse, despite the racist, anti-immigrant policies of the National Rally. Why?
Well, you see there are two sorts of left programs. There is “a social democratic one that tries to equalize chances and redistribute without destroying the incentives to create and produce“. (By this Blanchard means capitalism is maintained). And then there is “a revolutionary one, which goes much further, is nearly confiscatory in nature” Shock, horror! Blanchard: “as a social democrat, I believe in equalizing chances, in improving education, in redistributing income from the rich to the poor”, but the NFP program “can only lead, like many of its predecessors, to economic catastrophe.”
In his usual quixotic hubris, Macron is gambling that, in calling the election, along with the help of the media and mainstream opinion, he can frighten enough voters not to vote for the ‘extremes’ of right or left, and so restore the political stability of French capitalism. If the polls are right, that gamble will not pay off.
The mainstream and official economic forecasts try to put on a brave face and expect France to come out of its stagnation and recover modestly in 2025.
But this is based on hope more than expectation. And now French capital faces political paralysis at best or a damaging hit at worst.
Michael Roberts Blog 
I tend to agree with you. However, a few clarifications and contradictions:
– The least essential point: the second round can take place with 3 candidates if the third candidate obtains 12.5% of registered votes. This is usually rare, but will probably happen in many constituencies due to the high turnout.
– You underestimate the shift in the RN’s political line. Up until now, it has maintained a blurred line to bring together a heterogeneous social base (from the working classes to the bourgeoisie). But during this election campaign, it has assumed its support for the bourgeois class (it no longer wants to repeal Emmanuel Macron’s pension reform, it no longer wants to leave the European electricity system, it wants to cut corporate taxes, it insists on paying down the debt, etc.). Moreover, the media largely demonize the economic program of the Nouveau Front Populaire, much more than that of the Rassemblement National.
– The Nouveau Front Populaire’s program is the only one to be costed, macro-economically sound and to seek revenue for its budget. In my opinion, it still lacks radicalism, but it is in line with your proposal for “planned public investment through control of the strategic sectors of the French economy to increase production, investment and income.”
I can provide you with sources on this or that element if you need them.
If a foreigner’s understanding is correct, there are extensive powers available to Macron to simply ignore a divided parliament. I’m not altogether certain that Macron seriously hopes to regain seats for his “party,” which appears to be more a collection of political B-listers and small largely mummified nostalgia outfits, usually of a so-called centrist coloration. And their only unifying principle is largesse from the president’s office. But if there is a bitterly divided parliament, that will prevent in practice the exercise of what parliamentary power over policy is written in the constitution. If Macron pursues the war policies he has hinted at, the exigencies will increase the effective powers of the president even more, it seems to me. Macron’s plans may well include a lot of President Bonaparte? The report that Bardella refuses ahead of time to compromise the RN with submission as a minority party, to Macron, suggests that what control by parliament of policy exists will be fatally compromised without a workable majority.
In England, the Spectator published this: Is Macron considering using France’s emergency powers? | The Spectator To my eyes, it looked more like encouraging Macron to do this than a serious report on what’s really happening behind the scenes. But it could have been a trial balloon by co-thinkers in England to see how people would react to such a course. So far as I can tell, if so, it would be with complete indifference. From the US, it looks like the respectable people in France loather Melenchon as much as their English counterparts loathe Corbyn, for roughly the same reasons.
But fair warning, the last presidential election in France I referred to Macron the monster and respectable opinion there was quite scornful of such poor judgment.
“NR would cut the pension age back to 60 years, reversing Macron’s recent forced rise to 64 years”
I’m not sure that was ever true, but in any case they have rolled back all of their labour-friendly measures.
“The solution is not austerity but planned public investment through control of the strategic sectors of the French economy to increase output, investment and incomes.” What are the “strategic” sectors? How much of the economy are they? If they leave a trivial part of the economy to capitalist businesses, you simply mean socialism without revolution. Or, you’ll have to show why the remaining capitalist sectors will not invade “strategic sectors” when they can and will not sit on their profits when “their” sectors do not offer enough more profit to warrant more investment.
“The solution is not austerity but planned public investment through control of the strategic sectors of the French economy to increase prosperity.” -> “He arado en el mar y he sembrado en el viento.” Simón Bolívar. (Just a bit of grandiloquence on my part) The question here is that austerity and prosperity are not free will decisions. They are imposed by the MATERIAL circumstances: “France Oil Consumption data is updated yearly, averaging 1,869,000 Barrel/Day from Dec 1965 to 2022” -> “The data reached an all-time high of 2,499,000 Barrel/Day in 1973 and a record low of 1,065,000 Barrel/Day in 1965.” -> “France Oil Consumption was reported at 1,420,000 Barrel/Day in Dec 2022” -> “Oil consumption in France reached a record low in 2020, at roughly 1.3 million barrels per day, but recovered slightly by 2022, with a consumption of 1.4 million barrels of oil daily. During the period in consideration, figures saw an overall decrease of over 500 thousand barrels per day.” -> Population 48,168,804 in 1965 (0,02 b/d per capita), 53,207,734 in 1973 (0,05 b/d per capita) and 67,970,000 in 2022 (0,02 b/d per capita). Farewell prosperity! Welcome austerity.
The important thing to extract from this is that there is no revolutionary situation in the First World. The First World working classes are polarized because their respective capitalist classes are polarized, so each has to take a side. There is no class consciousness.
Needless to say, such scenario essentially guarantees the victory of fascism. The First World will degenerate from the liberal international to the fascist international. An epic battle of international proportions between the unipolarists and the multipolarists is brewing.
There can be no revolution in the first world, in fact, no revolution of subsumed consciousness.
And dead labor continues its devouring of living labor, day and night.
Let’s face it, proletarian is an unsuccessful bourgeois, who knows nothing of his historical resignation, and in any case, half of him is essentially reactive.
However, as nature abhors a vacuum, they can manifest themselves in erratic ways, and without avant garde.
The looting and violent expropriation of consumer goods.
As far as the elections are concerned, no majority will emerge; 282 seats are needed for that.
And Macron seems to have played it right.
What’s next promises to be rock and roll in France.
Translated with DeepL.com (free version)
It seems to me the claim the working classes are polarized—which here means all are committed to the two factions of the imperialists—has to be empirically confirmed by the mobilization of the workers in support of “their” imperialist faction. Not voting is not polarization. The objective fact is that no one can vote no, not even by abstaining…to subjectively the illusion one can vote against is very widespread.
The equation of unipolarists to fascists needs explanation.