Europe
Le Pen proposes German-style debt rule to soothe French bond market
Marine Le Pen has unveiled plans for a budgetary rule that she said would put France’s public finances back on track.
According to Reuters, Le Pen aims with this step to ease investor concerns regarding her fiscal credibility.
The historic leader of the National Rally (RN) is leading in the polls for both rounds of the election scheduled to take place between 18 April and 2 May.
However, investors have scaled back their positions in French assets because they doubt that whoever wins the presidency next year will be able to bring the fiscal deficit under control.
The premium demanded by investors to hold 10-year French bonds over their German counterparts rose above 150 basis points on Friday to reach its highest level since late 2011, after the government’s 2027 draft budget provided little relief.
Writing in the French newspaper L’Opinion, Le Pen stated that her proposed “golden rule” would be submitted to a referendum and that, similar to Germany’s debt brake mechanism, it would bind lawmakers in annual budget legislation, with very limited exceptions.
The rule would require the fiscal deficit to narrow each year by at least half a percentage point of gross domestic product.
Le Pen argued that, through this mechanism, the budget deficit would fall from this year’s 5.4% to 2.9% in 2032, when the next presidential term concludes.
The debt ratio, which currently stands at 119% of GDP, would continue to decline until it reaches 60%, and would remain close to a balanced level.
Le Pen did not enter into details regarding when the referendum might be held or how the government would deliver spending cuts of this scale.
However, the French politician described the figures she outlined as a “minimum”, stating that her fiscal programme, to be unveiled on Tuesday (6 October), would reduce spending even more rapidly.
She reiterated her commitment to achieve 125 billion euros in savings over five years, noting that this figure would be net of tax cuts.
Le Pen argued that neither economic growth nor tax increases could repair the fiscal position.
Stating that lawmakers could permit a larger budget deficit only by a three-fifths majority, Le Pen added that a second consecutive exception would require a referendum.
She added that the High Council of Public Finance would approve the assumptions underpinning the annual deficit ceiling, and that the Constitutional Council would reject “insincere” budgets.
The French government presented its 2027 draft budget last Thursday.
The bill seeks to enact unpopular austerity measures that could narrow the deficit and reassure bond investors who have grown increasingly jittery ahead of next year’s presidential election.
Budgetary tightening would be carried out through freezes on public sector pay and on all pensions except the lowest, restrictions on local authority budgets, curbs on healthcare expenditure, and cuts to tax relief on employers’ payroll contributions.
While these measures avoid broad-based tax increases on households and businesses, the extraordinary surcharge imposed over the past two years on France’s largest corporations would be reduced by 30%.
“This budget puts us back on the path of fiscal consolidation through a substantial effort,” Finance Minister Roland Lescure told journalists, adding that the savings totalled 54 billion euros, of which 43 billion euros would represent fresh savings in 2027.
France’s benchmark 10-year borrowing costs rose to 4.96% on Thursday.
This stands close to 5% and represents the highest level recorded since July 2002.
Investors remain worried by political uncertainty ahead of the elections as they question the government’s ability to keep the deficit under control.
Europe
Spain’s Sánchez calls snap election for 29 November over housing
Spanish Prime Minister Pedro Sánchez has called a snap general election for 29 November amid an ongoing housing crisis.
The election will take place on Sunday, 29 November, the earliest possible date under procedural rules.
In a hard-hitting speech, Sánchez framed the contest as a choice between “regression” under a “far-right coalition” and “continuing to move forward” under his progressive administration.
Sánchez said that in an environment of high political tensions, global instability, the climate crisis, and uncertainty created by the rise of artificial intelligence, the election would centre on who should govern Spain during this turbulent period.
Right-wing parties in parliament had blocked the minority government’s emergency measures on housing amid widespread protests.
The government’s efforts to address the housing crisis had been set out in two royal decrees.
These decrees contained a series of measures aimed at improving access to housing, ranging from an eviction ban until 2030 to the regulation of temporary rentals and room-by-room leases.
However, the decrees were rejected in the Congress on Friday by the conservative People’s Party (PP), the right-wing Vox, and the right-wing Catalan pro-independence party Junts.
The PP, which leads in the polls but may require the support of Vox to form a government, said it rejected the government’s plans because it believes the best way to resolve the crisis is construction, not regulation.
The rejection of the decrees triggered furious reactions from the crowd gathered outside the Congress building.
Long-simmering anger over high rental costs and the precarious nature of many tenancy agreements erupted late last month following the eviction of Maricarmen Abascal.
Abascal, 87, was evicted from the home in Madrid where she had lived for 70 years. She said she could under no circumstances afford the 230% rent increase demanded by the investment fund that acquired her flat.
Her plight prompted tens of thousands of people to take to the streets in protest, and a massive tent encampment reminiscent of the 2011 indignados movement was erected in Madrid’s central Puerta del Sol square.
Throughout the weekend, major demonstrations were held across the country, with protesters stepping up their demands for urgent action on the housing crisis.
Authorities stated that 70,000 people attended Saturday’s protest in Madrid, while organizers put the figure at 500,000.
Although opinion polls show the PP running comfortably ahead of Sánchez’s Spanish Socialist Workers’ Party and indicate rising support for Vox, the prime minister may be hoping that the focus on the housing issue, together with the right’s rejection of the government’s plans to tackle the crisis, will mobilize left-wing voters.
The housing issue has also served to divert attention from the government’s widely criticized handling of the ongoing crisis in Spain’s North African enclave of Ceuta.
That crisis escalated after approximately 70,000 people crossed into the enclave from neighbouring Morocco within a 48-hour period.
Europe
Over 500 former European diplomats urge EU sanctions on Israel
More than 500 former European ministers and diplomats, including four former prime ministers, have called on the European Union to urgently impose sanctions against Israeli settlement policies. Warning that the E1 project would extinguish a two-state solution, the signatories demanded a ban on trade with illegal settlements and binding steps at the EU Foreign Affairs Council meeting on 12 October.
More than 500 former European ministers, ambassadors, and senior officials, including four former prime ministers, have called on the European Union (EU) to take urgent measures against the expansion of Israeli settlements in Palestinian territories.
The signatories warned that it is merely a matter of time before the Israeli government announces construction tenders for the first phase of the E1 settlement project, which would bisect the West Bank and eliminate the possibility of a two-state solution.
Sanctions on financial bodies and trade ban demand
Addressing the European Commission, the senior diplomats and politicians demanded that sanctions be proposed without delay against all financial institutions and service providers supporting illegal settlements, above all E1.
The initiative text called for the presentation of legislative proposals that would prevent trade between the EU and these settlements. The signatories also requested the progression of long-stalled drafts stipulating the suspension of trade provisions in the EU-Israel Association Agreement. The initiative stressed that decisions must be taken at the EU Foreign Affairs Council meeting on 12 October.
“Time for the EU and member states to act”
Attention was drawn to the requirement that EU bodies and member state governments act in accordance with their clear obligations under the founding treaties of the EU and international law.
The statement noted that internal EU divisions resulting from the stances of Germany, Italy, and other countries blocking the adoption of joint measures must be overcome.
The call for urgent action pointed to ongoing civilian casualties and severe humanitarian conditions in Gaza, accompanied by inadequate aid deliveries and reconstruction activities that have ground to a halt, as well as escalating settler violence, land seizures, and the relentless displacement of Palestinians in the West Bank.
The statement concluded: “The time for the EU and its member states to act is definitely now.”
Europe
Germany expands North Sea military ports and plans new naval base
With the transformation of the port of Bremerhaven into a high-capacity military hub and the prospective establishment of a fifth German naval base in Emden, the federal government is accelerating the militarisation of the German coastline.
According to German Foreign Policy, the logistics infrastructure in Bremerhaven will be modernised and expanded to unload massive volumes of weapons and ammunition as quickly as possible and transport them onward to potential battlefields in Eastern Europe.
This is set out in a memorandum of understanding signed this week between the Ministry of Defence and municipal authorities in Bremen.
The federal government is providing up to 1.35 billion euros for this purpose, while the federal state of Bremen is contributing more than 212 million euros.
Bremen has the highest poverty risk and the highest child poverty rate of any federal state in the country.
The allocation of hundreds of millions of euros to expand military logistics rather than tackle poverty is also supported by senators from the Left Party (Die Linke) who sit in the state government.
Modernisation intensifies in Bremerhaven
Bremerhaven, Germany’s second-largest port in maritime freight handling behind Hamburg and ahead of Wilhelmshaven, is regarded as ideal for handling military cargo.
The port possesses significant capacity for offloading not only containers but also vehicles, alongside heavy-lift areas capable of handling even heavy military hardware such as main battle tanks. Moreover, because it can be accessed without passing through locks, access is substantially easier and faster.
Finally, it has good links to roads and particularly to railways, which is vital for the rapid transport of weapons and ammunition in the event of a crisis or war.
The port’s particular suitability as a military transshipment hub also stems from its history: it has been used by US forces since the end of the Second World War.
During the Cold War, it served as the central transshipment port in the Federal Republic of Germany and was expanded accordingly.
After 1990, it lost its significance for the US; however, with the escalation of the conflict in Ukraine, the US presence increased once more.
US activity escalated initially under exercises such as Defender Europe 2020 and subsequently from 2022 onwards in the context of the war in Ukraine.
As early as 2023, experts noted that Bremerhaven was operating as “an arms hub just like in the old days”.
Ports optimised for military logistics
The federal government is currently working to further increase the port’s military logistics capacity.
For instance, harbor basins will reportedly be dredged, and road and rail connections will be expanded.
Container facilities will be modernised and adapted to carry heavier loads.
This applies to both cranes and storage areas, with plans also in place to expand these storage areas into new zones.
A spokesperson for the port operating company Bremenports was quoted as saying: “The efficient transport of military hardware is no longer limited to tanks alone.”
Today, weapons and ammunition are also delivered in containers, which would need to be rapidly unloaded and forwarded in the event of war.
To ensure this, plans are also being made to build a new railway swing bridge at the Kaiserhafen. According to reports, the existing bridge is described as a “bottleneck” that slows down the movement of military equipment unnecessarily.
In addition, the heavy focus on military logistics demands costly security measures.
For example, not only will new fencing and privacy screens be erected, but drone defence systems will also be installed and cybersecurity measures implemented.
Left Party senators back armaments
The federal government is allocating approximately 1.35 billion euros through 2031 to optimise military logistics in Bremerhaven and, in conjunction with this, adapt Bremen Airport more effectively to the needs of the Bundeswehr.
According to the Mayor of Bremen, Andreas Bovenschulte, this represents the largest grant the German government has ever provided for a project in the federal state of Bremen.
The state of Bremen is contributing an additional 212 million euros to the “Bremerhaven 2031 Deployment Hub” project.
While large sums are being funnelled from Bremen’s state budget into war preparations in this manner, approximately 25.9% of the state’s population was classified as at risk of poverty in 2024, with 28.6% of all children living in poverty.
This makes Bremen the federal state with the highest poverty risk and the highest rate of child poverty.
Approval for funding military logistics in Bremerhaven with hundreds of millions of euros from the state budget also came from two Bremen senators belonging to the Left Party.
The Left Party’s Senator for Economic Affairs and Ports, Kristina Vogt, praised the “pragmatism” of “improving our infrastructure, which is already used for civilian purposes, for military ends” rather than constructing new facilities.
North Sea joins Baltic Sea militarisation
With the expansion of the Bremerhaven military hub, the militarisation of Germany’s coasts is progressing.
Until now, the focal point of Germany’s naval infrastructure has been the Baltic Sea coast. This was partly because during the Cold War, the naval activities of the Federal Republic of Germany were directed against the Soviet Union and Warsaw Pact states.
Alongside several training facilities, the German Navy primarily operates three major naval bases here, situated in Eckernfoerde, Kiel, and Rostock-Warnemuende, as well as the Naval Command based in Rostock.
In the North Sea, these are complemented by the naval base in Wilhelmshaven and the Naval Air Command at Nordholz near Cuxhaven.
The Naval Air Command is the third major unit of the German Navy, alongside Flotilla 1 based in Kiel and Flotilla 2 based in Wilhelmshaven.
At present, approximately 16,000 soldiers and 1,800 civilian staff from the Bundeswehr are stationed at the Navy’s main bases and various smaller installations.
As in other branches of the armed forces, the German Navy aims to expand its personnel numbers.
Germany’s fifth naval base to be built
In addition to the four existing naval bases and the Bremerhaven military hub, the federal government plans shortly to announce the construction of a fifth naval base, also located on the North Sea.
According to reports, Emden has been selected as the site for the base. Defence Minister Boris Pistorius and Lower Saxony’s State Minister Olaf Lies are scheduled to outline the next steps regarding a potential new naval base there on Monday.
Emden previously hosted a naval base during the Cold War, but the facility was closed in 1997.
According to reports, one argument in Emden’s favour is that it holds the largest unused area among Lower Saxony’s North Sea ports.
Discussions have been ongoing for some time over how to utilise this disused land reasonably, although these debates previously centred on civilian use.
According to the German Navy’s plans, the new naval base will accommodate seven frigates, ten minesweepers, and ten tugs, alongside a four-digit number of Bundeswehr soldiers and civilian personnel.
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