Far-right candidate Marine Le Pen took her campaign to the Burgundy countryside to crush rival Emmanuel Macron a day after the French presidential runoff (Emmanuel Macron) An otherwise positive pain point economic record.

There, a grain farmer told her about his struggle with soaring fuel and fertilizer prices, echoing what French voters told pollsters about their biggest priority ahead of the April 24 runoff: the cost of living soaring.

“Another dark cloud is gathering over the French,” she said, further predicting food price inflation.

The candidate’s political party, focused on immigration and whose economic policies are little known, has proposed tackling the problem by scrapping VAT on a basket of food and basic household goods, while reducing the tax on electricity and basic household items from 20 percent. to 5%. gasoline.

It is one of a series of measures in Le Pen’s plan that will put her France on a new economic course, driven by more protectionist, nationalist ideas than business-friendly ones. agenda Macron supports.

In keeping with her campaign slogan of “give the money back to the French”, she proposed big tax cuts and new spending. Paris bar owner Philippe Poitier said her focus on the wallet issue won him over. “She seems to have a good idea, especially the tax cut on gasoline. We need someone to do something about it,” he said.

There are risks to Le Pen’s economic strategy.Analysts say her plans will increase 105 billion euros A year to France is already very wide Public deficit of 161 billion euros 2021, or 6.5% of GDP.

Aspects of her agenda, such as a referendum on immigration that would assert French precedence over European law, could also establish a conflict The European Union, which will have an impact on financial markets. Another tipping point was when she expressed hope that France would reduce its annual contribution to the EU budget by 5 billion euros.

“When Hungary or Poland violate EU law, there will be some tension in currencies and markets, but it’s manageable,” said Philippe Gudin, an economist at Barclays. “But if it happened in France, one of the founding members of the EU, the problem would be much bigger.”

Gooding estimates that Le Pen’s plan will send about 42 billion euros, or 1.7 percent of GDP, to the French public. But if her presidency sparked a fight with the European Union, followed by debt crises like Greece’s a decade ago, ordinary voters will ultimately pay the price, he said.

During Le Pen’s presidency, all people under the age of 30 will be exempted from paying income tax and will provide young families with interest-free loans of up to 100,000 euros, with debts forgiven if they have three children. A French sovereign wealth fund will be created to promote an economy focused on what she calls “localism” rather than Macron’s “globalism”.

not like Macron wants Increase Retirement age, she would keep it at 62, but lower it to 60 for those starting work young.

While Le Pen and Macron claim their plans will not increase public deficits, the Montaigne Institute think tank found that both would make them worse because they overestimate savings and underestimate costs.

Le Pen, for example, has said that excluding migrants from benefits such as social housing and health care would save 18 billion euros, but the Montaigne Institute thinks that will be half. Macron’s plan will increase the public deficit by 44 billion euros.

The Medve employers’ federation, which supports Macron, has warned that Le Pen’s economic plans will cause France to fall behind its EU neighbors.

Others doubt that Le Pen can deliver on her promises. Much depends on whether her Rassemblement National party wins a majority in parliamentary elections in June.

The prospect of a Le Pen victory has been already Financial markets were volatile. The extra yield France pays on borrowing relative to Germany, the euro zone’s de facto safe haven, rose to its highest level since the start of the pandemic after Macron’s polling lead narrowed ahead of Sunday’s first vote. .

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The spread on the 10-year bond reached 0.56 percentage point, still below the nearly 0.8 percentage point reached during Le Pen’s last presidential campaign in 2017, before retreating slightly after Macron’s apparent solid first-round lead. The euro also rebounded.

latest poll predictions Macron will win the runoff with 53 percent of the vote.

Vincent Mortier, chief investment officer at asset manager Amundi, said the market seemed “complacent with Macron’s victory, although the possibility of Le Pen winning in a non-market friendly scenario is not negligible”.

One difference between Macron’s and Le Pen’s economic policies is his greater emphasis on fostering a vibrant labor market as the best way to secure purchasing power. His labor reforms helped bring the unemployment rate down to around 7 percent, the lowest level since 2008.

However, despite France’s 5.1% year-on-year inflation rate, the lowest in Europe, according to Eurostat, voters did not appear to be impressed, possibly because inflation concerns have taken hold.in the most recent Ipsos pollTwenty-five percent of respondents said they had confidence in Macron’s handling of living standards, compared with 21 percent for Le Pen.

Irdrielle Mounet, a student in Paris, said she doubted the presidential election would have any impact but was ready to vote for change. “Le Pen says she’s more focused on helping young people – so maybe it’s worth a shot.”

Additional reporting by Sarah White in Paris