French Far Right Sets Out Budget Red Lines in Warning to Barnier

(Bloomberg) -- France’s far-right National Rally outlined a fiscal wish list for next year that includes taxing superdividends and share buybacks, keeping up pressure on Prime Minister Michel Barnier as parliament starts debating his 2025 budget bill.

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The new government’s quickly cobbled-together proposals include €60.6 billion ($66 billion) of spending cuts and tax hikes in an effort to bring the country’s ballooning deficit under control.

While the National Rally is not part of the administration, which is mainly made up of President Emmanuel Macron’s centrists and Barnier’s conservative Republicans, the party matters because it has enough lawmakers to topple it by supporting a no-confidence vote in parliament alongside the leftist New Popular Front alliance.

National Rally lawmaker Jean-Philippe Tanguy said on Wednesday that it would abstain from a no-confidence motion as long as the government does more to cut debt and increase what he called “fiscal justice.” Barnier has said the budget bill can be “perfected” and indicated he is open to talking to all parties.

“We want to end share buybacks,” Tanguy, who acts as his party’s spokesman on economic affairs, told a news conference at the National Assembly. He said they were “a toxic practice” and “evidence that there are abusive profits being made.”

Such transactions should be taxed at 33%, higher than the government’s proposal of 8%, he said. He also called for taxing superdividends, which he described as being 20% above the average of the previous 20 years.

Tanguy said the two measures would raise €10 billion, adding that the current budget plans would scare French consumers and put the brakes on household spending, harming growth.

He also said the party supports a special tax on companies such as US big tech giants and Netflix Inc. that use France’s telecom infrastructure. This would apply to those using more than 1% of overall bandwidth and would raise €550 million, he said.

Weeks of debate on Barnier’s budget bill get underway at the National Assembly finance committee on Wednesday before heading to the floor of the lower house on Monday. The legislation must be adopted by the end of the year.

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