Le Pen eyes bond markets with bigger spending cuts pledge if far right win presidential vote

Paris, October 6 - Marine Le Pen has dramatically increased her plans to slash government spending if the far-right party she leads secures a victory in the upcoming French presidential election, a strategy aimed at bolstering the party's financial standing amid rising tensions in the bond market. The frontrunner's borrowing costs have surged in recent days to levels not seen since the early 2000s, as France has become a focal point for global bond market instability due to the country's strained public finances and political uncertainty ahead of the April-May two-round election.

Speaking to journalists on Tuesday, Le Pen announced a new target of €140 billion in net savings by 2032, up from her initial €125 billion proposal for a five-year presidency. Most of these cuts would be implemented within the first three years, primarily through government restructuring. Her plan aims to bring France's budget deficit down to below 3% of economic output by 2030, compared to 5.4% this year.

Le Pen also plans to limit France's net contributions to the EU budget to €5 billion, a level not seen since the early 2000s. Discussions with the European Central Bank were necessary to help lower France's borrowing costs once the country regained control of its finances. Le Pen further emphasized her intention to address France's costly pension system in the coming weeks.

Financial markets reacted to her remarks, with French bond yields briefly dipping further before stabilizing around previous levels. The fiscal crisis has become a central campaign issue, and convincing investors to fund campaign pledges is expected to be a significant challenge for the next president. Le Pen, currently leading in the polls for the April 18-May 2 election, has attempted to establish budget credibility through her savings plans.

She proposed a constitutional "golden rule" requiring an annual reduction in the budget deficit until the national debt reaches 60% of economic output, down from the current 119%. However, Le Pen faces skepticism from business leaders over her euroscepticism and plans to reverse the controversial 2023 pension reform. Meanwhile, Prime Minister Sébastien Lecornu's government has sought to alleviate market concerns by presenting a 2027 budget with €43 billion in new savings, though the fate of these proposals in France's divided parliament rests with opposition parties, with Le Pen's National Rally (RN) being the largest.