“Why the RN would lead France to bankruptcy”

Published on June 24, 2024 at 12:38 p.m.

The National Rally wants to unilaterally reduce France’s annual payments to the European Union budget. According to the economist, such a default would have catastrophic consequences for the country.

A little-discussed point in the National Rally (RN) program would precipitate France towards real bankruptcy. Jordan Bardella has just promised to unilaterally reduce France’s annual payments (26 billion euros, or 1% of our GDP) to the European Union budget, probably to save a few billion euros.

However, this would lead to by the very fact an explicit default (a cessation of payments) by France on its international commitments and on its sovereign financial debt. Since Roman law (Agreements are to be kept, “covenants must be respected”), since the Treaty of Westphalia (1648) and even more since the Vienna Convention on the Law of Treaties (UN, 1969), an international treaty is essential de jure completely to the national law of a country.

Agreements are to be kept

In other words, for France, legally, all international treaties (at least those signed since 1969) are binding de jure to French law, whether ordinary laws, organic laws or our Constitution. It is logical: if a State could unilaterally modify a treaty as it wished, there would no longer be any international law at all. What would otherwise be the value of international treaties if each contracting country could unilaterally modify their content? Null: each country, anticipating that the others could unilaterally modify the treaty, would refuse from the beginning to sign this treaty. No more international treaties would hold: the death of international law.

The Agreements are to be kept does not prevent a country from doing as it pleases, but then that country must withdraw from the treaty by a vote of its Parliament. This is not a small matter, the entire legitimacy of international treaties is at stake, particularly for our security. “There is a twenty-year-old pact between the greatness of France and the freedom of the world” (De Gaulle, 1941). Is Jordan Bardella planning to demean France by violating its treaties?

Furthermore, in France, the Constitutional Council and the Council of State have several times reiterated, in their opinions, the supremacy of European law over French law (including over our Constitution). However, Jordan Bardella’s proposal amounts to unilaterally violating the Treaty of the European Union (known as the Treaty of Lisbon, 2007) and France’s financial commitments within the framework of the current European budget (2021-2027).

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Let us note here that Greece, at the worst of its financial crisis, always paid its financial contribution to the EU rock and solid. Bardella wants to do, for the international status of France, worse than Greece at the bottom of the hole!

Note also that even Mrs Thatcher, at the height of her crusade against Europe, never implemented the Bardella proposal. She waited for the negotiation of the following European budgetary package (7 years).

Incompetence or bluff?

Why this proposal from the RN?

• First hypothesis: incompetence and ignorance. But Marine Le Pen is a lawyer and knows the Agreements are to be kept, fundamental pillar of Western law: respecting contract law is at the heart of our civilization. Withdrawing from the EU treaty is a very old proposal from the FN and then the RN: they have had plenty of time to think about it. Note that the FN/RN has always voted against European treaties.

• Second hypothesis: Jordan Bardella would like to play a bluff to try his luck. Then, the European Commission would immediately declare France in default of its international obligations. It would suspend its payments to France: for us this would be the immediate end of the Common Agricultural Policy and all EU subsidies to our farmers. Not sure that they would happily accept this prospect…

Not sure either that investors in our sovereign debt and the rating agencies like it! Noting that France would have violated the principle of Agreements are to be kept, they would conclude that a Bardella government would do anything for an immediate handful of cherries. Logically, for them, a Bardella government would also be ready to repudiate France’s signature on its sovereign debt. Remember that to default on France’s public debt, all it takes is a simple decree signed by the Prime Minister and the Minister of Finance.

France’s rating would automatically go from AA- to D (= default) after three months. All investors would run away from French debt, and the interest rates applied to France would soar beyond 20%. Not only would it be an absolute shame (France has not formally defaulted on its debt since the two-thirds bankruptcy in 1787), but France was at war with all Europe). It would also be the economic and financial catastrophe of France, Armageddon version: bankruptcy of all banks and insurance companies, cessation of payment of salaries and social benefits, end of exports and imports, cessation of public services. In comparison, the Greek crisis of 2010 would seem like a mild cold.

Neither the European Central Bank, nor the European Commission, nor Germany would come to our aid, because our misfortune would come from a unilateral decision by a Bardella government. No hope since Frankfurt: the ECB does not have the right to help a country as long as it does not sign an IMF or similar agreement (a major shame for the “greatness of France”) and as long as it is not undertaking drastic efforts (= Greek-style mega austerity) to consolidate its public finances. Not sure that RN voters would appreciate it.

• Last hypothesis, Bardella, with this proposal, wants to irremediably but surreptitiously trigger France’s exit from the EU and the euro by defaulting on all of our debt and on our international treaties, with the aim of generate total chaos to establish strong far-right power. You do not believe in it ? Let us remember that leaving the EU, the euro and NATO was the explicit program of the FN/RN from 1972 to 2017. Try it once, it’s forever; there will be no return ticket.

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So, we oscillate between the total incompetence of the RN (but then why believe them on the rest of their economic proposals?) and the hidden cynicism of the RN to get France out of the EU and the euro, with a financial Armageddon and economic for France.

Voters dissatisfied with their purchasing power and/or concerned by the greatness of France should not vote RN. Only crazy people and suicidal people could.