France's public finances are predicted to face significant strain regardless of the election outcome, as both major political blocs' spending promises disregard the mathematical realities and lack detail, according to France's AFP news agency. The National Rally (RN) and the New Popular Front (NFP) have put forth ambitious plans that could overtax the country's coffers.

If the National Rally (RN) were to win, one of their key proposals is to slash the value-added (VAT) sales tax on energy. The party intends to partly fund this move by contributing €2 billion less to the EU budget, despite the fact that the bloc's 2021-2027 budget has already been approved. However, these savings would not fully offset the loss in public revenue, amounting to €7 billion for the rest of this year and €12 billion annually.

To compensate for the revenue shortfall, the RN also plans to impose a higher levy on exceptional profits from power producers and shift shipowners from the current tonnage tax to regular corporate tax. In addition, the party aims to index pensions to inflation, reduce the retirement age to 60 for individuals who began working at 20 or earlier, exempt certain workers under 30 from income tax, and raise wages for teachers and nurses. The RN also intends to replace the 2023 increase in the retirement age to 64 from 62 with a more progressive system, albeit without providing specifics.

On the other hand, the New Popular Front (NFP) alliance has promised to increase pay for civil servants by 10%, provide free school lunches, supplies, and transportation, and raise housing subsidies by 10%. To finance these proposals, the NFP plans to introduce a tax on superprofits and reinstate a wealth tax on financial assets, generating an estimated €15 billion from each measure. The bloc also seeks to freeze prices of essential food items and energy while raising the minimum wage by 14%. Small firms unable to cope with the wage hike would receive subsidies. The NFP also plans to hire more teachers and healthcare workers and provide home insulation subsidies, to be financed by closing tax loopholes, implementing a more progressive income tax system, and allowing families to inherit a maximum of €12 million. Like the RN, the NFP proposes abolishing the 2023 retirement age increase and eventually reducing it to 60. However, the NFP diverges from the RN's plan to reduce the budget deficit, as it rejects the EU's fiscal rules.

President Emmanuel Macron's party has committed to cutting the budget deficit to the EU ceiling of 3% of GDP by 2027. However, doubts have been raised by various institutions from the national auditor to the International Monetary Fund concerning the feasibility of achieving this goal. Macron's party has also pledged to reduce power bills by 15% from 2025 and tie pension increases to inflation. Although the party has not specified the extent of the increase, it has vowed to raise public sector wages. Additionally, the party has promised no broad tax hikes and an increase in the tax-free amount parents can gift to their children.

The upcoming election will thus be crucial for France's public finances, as the leading contenders' spending promises could put a severe strain on the country's budget. It remains to be seen how the public will assess these proposals in terms of their viability and potential consequences for the nation's financial stability.