France: Hamon promises unconditional basic income

Although taxes in France for citizens and companies are among the highest in Europe, presidential candidate Benoît Hamon wants to score points in the election campaign with greater redistribution of wealth.

GD/AD – 02/2017

Recent developments in the primaries for the French presidential election have intensified the mood of uncertainty. At the centre of these developments is the accusation that François Fillon, the candidate from the Republicans (former party of Sarkozy), had employed his wife for years as a parliamentary assistant to himself and his successor without anyone noticing her doing any work; a serious allegation in a primary which has been defined by conflict with the National Front.  

In terms of the reigning Socialist party, the decision has probably been already made: Benoît Hamon, left-wing socialist and former “student” of Michel Rocards, managed to knock out former Prime Minister Manuel Valls during the dramatic first round of the party primary. Harmon’s ideology is characterised by a programme of radically redistributing society’s wealth which, in many people’s opinion, would affect France’s current role in the EU as well as Franco-German cooperation. His promises are built around the stepped introduction of an unconditional basic income for all people of between 750 and 800 euros a month. As reported by “Le Figaro”, the total cost of the plan would be at least 350 billion euros per year.  

France is already close to the magic debt limit of 100% of gross domestic product (GDP). Taxes for citizens and companies – including income tax and tax on wealth and property – are among the highest in Europe. On the flip side of this sobering balance sheet is the government’s massive rate of expenditure, reflected by decades of excessively expanding the public sector. In addition to oppressive general unemployment, the current youth unemployment rate of 25.9% is of social and political significance.  

There is a lot at stake for Germany and the future of Europe with regard to France. The shock resulting from an election victory by Marine Le Pen would be comparable to developments in the US and cause a political and structural earthquake with unpredictable social and economic effects on the euro, exports, the EU and our social and political future.