After two years without an approved budget, the French government was finally able to ram one through without parliamentary approval, which was met with little market reaction. This unusual circumstance not only points to the way in which the European Monetary Union protects the fiscal profligacy of France, but also to how this situation might be in the interests of the far-right National Rally (RN) party in light of next year’s presidential election, with the RN’s Jordan Bardella likely to be their candidate.
How Has France Benefited from Its “Exorbitant Privilege” in the Eurozone?
When the EMU was founded, the German Bundesbank’s influence over monetary policy was preeminent. However, the founding of the European Central Bank (ECB) shifted the balance of power, enabling France to maintain low interest rates and spend freely without shouldering the entire burden of debt. France was spared the austerity measures that affected southern European countries during the 2010-2012 debt crisis, thanks in part to interventions by the ECB, including Mario Draghi’s “whatever it takes” promise. Despite its chronic budget deficits and repeated violations of EU fiscal rules, France has been subject to little enforcement, granting it an “exorbitant privilege,” in the words of former finance minister Valéry Giscard d’Estaing.
Why Did the French Government Push a Budget Without Parliament?
The budget was approved by the government of Prime Minister Sébastien Lecornu through decree powers, overcoming two no-confidence motions after giving in to demands from the Socialist Party. With a budget deficit of 5.4% of GDP expected in 2026, it is argued that budget discipline in France is still quite weak. However, financial markets welcomed the news, confident that the ECB would act if necessary. This case illustrates how politics can take advantage of the structural safety nets of the EU to give leeway to both centrist and extremist politicians.
Could Bardella’s Presidency Trigger a Eurozone Crisis?
Unless the appeal court overturns the disqualification of Marine Le Pen, Bardella, her 30-year-old lieutenant, is set to run as the RN candidate. He is likely to beat all other candidates comfortably, according to polls. The burning question for Europe is: Would the emergence of Bardella destabilize the eurozone? Experts say that the “exorbitant privilege” enjoyed by France dampens the risk. Instead of challenging EU rules, Bardella is expected to capitalize on structural advantages such as low borrowing costs and support from the ECB to push through his nationalist yet system-friendly agenda.
What Would Bardella’s Economic Policies Look Like?
Bardella’s recent book, Ce que veulent les Français, shows how he proposes to achieve this: through protectionist reindustrialization, reduction of red tape, and cutting “wasteful” government expenditure. Although the RN is known for its anti-immigration stance, Bardella plays down these themes in order to appeal to a wider audience. His proposal that the ECB should purchase French bonds indicates that he intends to take advantage of the EU rather than challenge it directly. However, his protectionist agenda is limited, as a full-scale protectionist policy would require a French exit from the EU, which is unlikely to happen under Bardella.
How Could France Benefit From EU-Level Investment and Defense Initiatives?
The European Commission is increasingly issuing debt to finance strategic investments, such as defense purchases, lessening dependence on the United States. As the country with the biggest and most diversified defense sector in the EU, France will be the biggest beneficiary. For Bardella, this is a chance to move forward with his nationalist economic agenda while remaining within EU norms.
Will Bardella Be a Revolutionary or an Opportunist?
Ultimately, Bardella’s appeal lies in reassurance rather than disruption. He positions himself as a pragmatic opportunist, ready to exploit France’s fiscal advantages and the EU’s institutional mechanisms. However, the system itself is fragile. Political miscalculations, global shocks, or financial turbulence could magnify the risks of even a system-compatible presidency. The real question may not be whether Bardella will break the EU, but whether his tenure could expose vulnerabilities that European policymakers cannot ignore.
