Capital Economy, Business and Finance
Michel Barnier has warned of a “severe storm” in financial markets if France’s parliament holds a no-confidence vote over his budget plans.
Marine Le Pen, the far-right leader and de-facto kingmaker, has already strong-armed Barnier into dropping a tax on electricity.
She’s warning he must accept further budget concessions by today – including raising pensions, cutting overseas aid and reducing immigration – or face a vote. One minister said the demands would cost $10 billion.
The prospect of a government collapse has pushed French borrowing costs up towards Greece’s and might require emergency legislation to pass a budget at the start of the year.
That would roll over tax provisions and spending limits from the previous year without adjusting for inflation, meaning that tax thresholds could rise for 17 million people. Le Pen’s brinkmanship puts her firmly in the driving seat.
