The Strategist

Le Pen: Revived franc will boost French exports

03/10/2017 - 13:40

Having disclosed her plans to redesign the French currency in case of victory in the forthcoming French presidential elections, leader of National Front movement Marine Le Pen said that she intends to introduce a new euro equivalent, allowing the fluctuation of the new currency.

Blandine Le Cain
Blandine Le Cain
Previously, she stated that any new national currency would still be tied to a basket of currencies. She noted that the new French franc is likely to fall "against any currency that is used by Germany," which will make export of French cars more competitive. Le Pen also added that the new currency could grow against the currency in Italy. In her opinion, the country would do better without the euro. By the way, many agree with Le Pen in this matter. According to some surveys and opinion polls, Italy now has even more chances of seceding from the EU until 2025 than the ever-depressing Greece.

Let’s however, go to Le Pen, who has often displayed conflicting views on this issue throughout the campaign. Initially, she did not even mention leaving the single currency, speaking about restoration of "currency sovereignty." 

Recently, however, she openly suggested rejection of the euro, but did not elaborate on the details of how this should be done. It is still unclear whether Le Pen meant currency float or administered exchange rate. Some of critics have already gave their remarks: "She is refusing the euro on Monday, and takes her words back on Tuesday, on Wednesday she talks about the currency peg, and suggests free fluctuation on Thursday. This is nonsense! How could this be implemented? Stop taking seriously her economic statements", said Patrick Artus, Chief Economist at Natixis Securities.

Le Pen abandoned all arguments about the euro when she submitted her program of 144 points a month ago, saying that she intended to "return to monetary sovereignty," not to mention the euro.

Experts explained that the new franc will be tied to a basket of currencies, comparable to the European currency unit - the euro’s predecessor. Nevertheless, when she was giving a speech on economic policy last week, she spoke openly about refusal of the euro. At a conference with the French business lobby in Paris on Tuesday she said that the single currency "was unstable because of too large discrepancies" between Member States.

She denies that getting out of the Eurozone and imposing what she calls "intellectual protectionism" will shoot the door for trade. Le Pen is convinced that the French vendors were doing much better before joining the European Union. "If I advocate introduction of a new national currency, I do it for us to conquer the world," she said.

On Wednesday, she did not mention anything about France's debt, but she said previously that it would be nominated in a new currency. Some even took Le Pen's warning seriously, and there’s a good reason for this. The French legislation allows changing nominal value of currency in which the debt (currently $ 1.7 trillion). This means effective destruction of most of the French debt.

Nevertheless, despite Le Pen's changing mood towards the franc, she remains consistent in one of her promises. Particularly, she wants to abolish independence of the central bank to print more new currency thus providing financial support to her. Most certainly, it won’t do any good.

According to the latest major polls, Le Pen will receive the most votes on April 23 in the first round of the election. On May 7 during the second round, she will lose to Emmanuel Macron. On the other hand, results of daily IFOP poll on Tuesday showed that 26% are ready to vote for Le Pen’s victory in the first round. Macron gained 25%.

In a recent interview, Le Pen called Macron, the former investment banker at Rothschild & Cie Banque, "a pure product of the banking system in a climate of wild globalization." 


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