A victory for Marine Le Pen in France’s elections would trigger a surge in the national debt pile to a fresh post-war high, Goldman Sachs has warned.
National Rally’s (RN) plans for €38bn (£32bn) in tax cuts and extra public spending would increase France’s debt burden from 111.6pc of GDP to 120pc by 2027, the highest level on record since at least 1950, according to analysis by the investment bank.
This would take France’s total debt pile from £2.75 trillion to £2.96 trillion, according to Telegraph analysis based on France’s current GDP, although this calculation does not take into account GDP growth over this period.
French bond markets have been in turmoil since President Emmanuel Macron called a snap election after RN’s landslide win at the European Parliament elections.
Investors are spooked because, although the elections on June 30 and July 7 will not threaten Mr Macron’s position as president, they open the door to an RN victory in the National Assembly, which means Ms Le Pen’s party would have control over tax and spending.
The hard-Right party has said it would introduce a progressive income tax cut, lower production taxes and introduce VAT reductions on food and energy, measures which Goldman Sachs would cost the public purse a total of €30bn.
RN has said it will also bring in a wealth tax, but Goldman Sachs estimates this would raise only €2bn.