Marine Le Pen unveils fiscal programme pledging French budget cuts

Marine Le Pen, the National Rally (RN) candidate for the French presidency, has presented her principal budget proposals ahead of next year’s elections.

Under Le Pen’s plan, a “golden rule” to be enshrined in the constitution would be approved by referendum, capping future budget deficits at levels consistent with a gradual reduction of France’s debt burden.

The French leader pledges to restore the primary budget balance within 18 months of taking office.

The proposals project reducing the public deficit to below 3% of GDP by 2030 and to below 2.5% by 2032, the final year of the next presidential term.

Public debt would be lowered from approximately 121% in 2027 to 112% of GDP by 2032.

A spending reduction programme totalling 140 billion euros would be implemented by 2032, offset by tax cuts of at least 30 billion euros.

By the end of the presidential term, public spending would be brought down to below 50% of GDP.

Le Pen said that once France regains control of its public finances, discussions should be held with the European Central Bank (ECB) to intervene in order to ease borrowing costs.

Support was proposed from the ECB to finance energy transition investments and decarbonisation projects.

The plan sets a target to achieve “carbon neutrality” before 2050 and to publish a new national low-carbon strategy.

The programme also includes a proposal for EU economies with high carbon emissions to contribute more to the EU budget through a new carbon-based contribution formula.

In addition, she called for a global initiative to tackle mounting public and private sector debt, including stronger international cooperation against tax evasion and tax fraud.

On immigration, the proposals call for tightening controls and implementing a “national preference” policy, which she stated would generate savings of 15 billion euros in the first year and 29 billion euros in a full year.

Regarding the EU, France’s annual net contribution would be reduced to 5 billion euros. There is also a proposal to finance part of the EU budget through EU-wide harmonised taxes on tobacco and alcohol.

Le Pen noted that this would also help combat cross-border fraud and smuggling.

A pension reform aimed at achieving savings of 15 billion to 20 billion euros over the long term is planned, with details of the reform to be announced in the coming weeks.

A new funded private pension scheme based on individual and collective pension savings is also under consideration, with details likewise to be announced in the coming weeks.

Multinational corporations deemed to underpay French taxes would be taxed on the revenue they generate in France, using an average profit margin to calculate taxable profit.

Corporate production taxes would also be reduced by 20 billion euros.

The Dutreil tax regime, which provides inheritance tax exemptions for family-owned businesses, will be reinforced.

A corporate tax reform for small and medium-sized enterprises will be announced later.

A 150% super tax deduction will be introduced for automation, digitalisation, and productivity-enhancing investments carried out by small businesses and farmers.

To regain investor confidence, Le Pen said she would replace the tax on substantial real estate wealth with a financial wealth tax, setting the rate at 30%.

Business owners’ shareholdings in their companies would be excluded from the scope of the new financial wealth tax.

Energy taxes would be cut, including significant value-added tax reductions on energy and essential consumer goods.

Subsidies for wind and solar power, which Le Pen described as “harmful”, would be ended.

Pledging to regain national control over electricity generation and lower electricity bills, consideration is being given to a proposal to provide zero-interest loans for “cleaner” vehicles.

The plan targets an increase in public research spending equivalent to 0.3 percentage points of GDP by 2032.

Le Pen also aims to raise France’s total research and development spending to above 3% of GDP.

A system of “VAT collection at source” will be introduced, which Le Pen said would help combat an estimated 26 billion euros in VAT fraud.

Pledging to reform public procurement rules to curb monopolies and overpricing, plans also call for setting minimum fines for economic offences above the financial damage caused.

Le Pen also proposes state reform in her programme. These pledges include:

The abolition of “almost all” state agencies and related public bodies.

A significant simplification of local government structures and France’s overlapping administrative tiers.

The abolition of more than 120 taxes.

A reduction in public sector headcount by not replacing certain retiring staff.