I watched a series of news broadcasts last night, all of which referred to what is now being called a polycrisis in France. As a consequence, the thought occurred to me that France might be leading the world into the end of neoliberalism. It took very little time to reproduce the data quoted on Channel 4 News, and to find some background support for my thinking. Over the next two hours, this post developed.
There are moments when a political and economic system reaches the end of its useful life, and I wonder whether France is approaching one of them now. My question is, in that case, a straightforward one: will France be the first major European country where neoliberalism collapses?
I am not suggesting that this will happen tomorrow, nor am I suggesting that France is about to abandon capitalism. My argument is different. France increasingly appears to be reaching the point where the demands made by the neoliberal economic order are incompatible with what its population is willing to tolerate. That is potentially much more important.
France has been pursuing what has been, in essence, a familiar neoliberal programme under Emmanuel Macron. Taxes on business and wealth have been reduced or reformed. Labour markets have been liberalised. The retirement age has been increased. Public spending has been constrained. Competitiveness has been prioritised. And the assumption was that growth would follow.
It has not. The European Commission expects French GDP growth of just 0.8 per cent in 2026 and 1.1 per cent in 2027. It forecasts unemployment rising from 7.7 per cent in 2025 to 8.7 per cent in 2027. Meanwhile, the government deficit is forecast at 5.1 per cent of GDP this year and 5.7 per cent next year, with government debt exceeding 120 per cent of GDP, compared to 102 per cent in the UK.
France is consequently subject to the European Union's Excessive Deficit Procedure. The EU expects France to reduce its deficit and constrain expenditure growth. That, however, creates an obvious problem. The neoliberal reforms have not delivered sufficient growth to resolve France's fiscal problems, but because they have not done so, France is now being told that it needs more fiscal restraint. Let me be blunt: that is neoliberalism prescribing more neoliberalism to cure the failure of neoliberalism.
Every sign is that the French are not accepting this. The current protests are ostensibly about schools. Students, teachers and parents were initially protesting about missing teachers, deteriorating buildings, long school days, and inadequate resources, but these protests are taking place alongside wider public-sector opposition to government spending cuts, and the protests have now seemed to merge and embrace broader themes. More than 250,000 people were reported to have demonstrated across France on 6 October.
It is possible to ask whether this is turning into protests like those in France in the summer of 1968, but the comparison should not be pushed too far because history does not repeat itself that neatly. But it would also be foolish to ignore it. The events of May 1968 began with students, but they did not remain a student protest. As appears to be the case in France yesterday, workers joined in, which led to factories being occupied and millions going on strike. Estimates differ, but somewhere between seven and ten million workers ultimately stopped work at that time, and much of France was paralysed.
That said, de Gaulle fought back and dissolved parliament and won the subsequent election convincingly. Superficially, therefore, the establishment won, but that interpretation misses the point. France had demonstrated that there were limits to what its people would accept, and French society was permanently changed by what happened.
That history matters now because France retains something that neoliberalism has spent decades trying to destroy elsewhere: which is a widespread belief that people have the right to resist economic arrangements imposed upon them. It still appears that the French do not necessarily accept that financial markets have the final word, that a government deficit means hospitals, schools, pensions and wages must be cut, or that the interests of bondholders take precedence over those of the population.
The evidence of recent weeks, which many commentators have noted, suggests that substantial numbers of French people are not going to back down quietly when told that deteriorating public services are the unavoidable price of satisfying financial markets. That creates a real crisis because France's government is being squeezed between its population, the European Union's fiscal rules, the bond markets and pressure from the far-right.
Those pressures point in opposite directions. The markets demand reassurance and the European fiscal framework demands consolidation, while large numbers of French people are demanding functioning public services and resisting further austerity. All three demands cannot necessarily be satisfied simultaneously. That is why this is much more than another French budget crisis. It is potentially a crisis of the economic model itself.
There is one thing that is certain, and that is that the far right cannot solve this. There is a chance that France could elect them to office. In support of their campaign, Marine Le Pen is attempting to present Rassemblement National as fiscally responsible, proposing €140 billion of net savings by 2032 compared with 2026. She is also, according to the Financial Times, suggesting constitutional rules requiring continuing deficit reduction.
But that does not resolve the contradictions in French society, or the opposing demands. It intensifies it. If the French people are already resisting cuts to public services, wages and social provision, a far-right government attempting an even larger fiscal contraction would face exactly the same economic constraint and potentially much greater social opposition to that which Macron's successive governments face now.
Le Pen could blame immigrants, Brussels, the left, public-sector workers or even the protesters themselves, but none of those things would alter the underlying economic problem. The reality is that, as the protesters correctly point out, France needs investment, functioning public services, decent wages, housing, education, healthcare and the resources required for the climate transition. A government promising simultaneously to satisfy the bond markets, cut the deficit dramatically and respond to widespread dissatisfaction with deteriorating public provision would eventually encounter crises for all those reasons.
There would, in fact, be another problem. A far-right government confronting mass resistance would face an increasingly stark choice between abandoning its economic programme and attempting to impose it through greater coercion. Neither provides the basis for a stable political settlement, and neither answers France's underlying economic problems.
So let me go back to 1968, and the riots of that year, which I just about recall. France did not overthrow capitalism then, and de Gaulle survived the immediate crisis, but the events demonstrated something important. When enough people withdraw their consent from an economic and political order, the supposedly immutable rules governing that order suddenly become remarkably negotiable. In France it would appear that a remnant of the sentiment remains.
The argument is, however, no longer principally about the deep social conservatism of Gaullist France. The argument now is about neoliberalism: the claim that financial markets must be appeased, that government budgets must satisfy arbitrary fiscal rules, that public spending must be cut when those rules are breached, and, above all, that there is no alternative.
Behind all those claims lies a much bigger question about who gets to decide. Is it the French state, the French people, the European Commission, the European Central Bank or the bond markets?
France has an additional difficulty because it does not issue its own currency. Monetary sovereignty ultimately rests with the eurosystem, not the French government. That makes the confrontation potentially more dangerous because the institutional mechanisms available to a sovereign currency-issuing government are not available to France on the same terms.
As a result, I think that what is happening in France now matters. The crisis might look like a dispute about budgets, schools, pensions or government debt, but is it really?. The question underneath all those disputes is much bigger, and is can French democracy continue to tolerate an economic system that repeatedly tells people that, whatever they vote for, financial markets must ultimately get their way?
The French have a long history of answering questions like that in the streets as well as at the ballot box. What is happening now is not 1968, but the echoes are impossible to ignore. The crucial similarity is not the particular demands being made but the possibility that a large part of French society might simply refuse to accept the limits that the established economic and political order says must constrain it.
If the French refuse to back down, while neither the neoliberal centre nor the far right can produce an economically and politically sustainable answer to their demands, something eventually has to give. My suspicion is that it will not be the French people. My question is whether neoliberalism will be jettisoned instead.
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Like everywhere else, the outcome depends on whether nonsense household analogies hold or whether people realise that their governments are choosing to be heavily in debt to a small fraction of their own populations and the global super rich and the negative impacts this has on how resources are allocated.
Thank you.
That household analogy is driven home daily by Macron’s supporters in the state and oligarch owned media.
The French version of Tufton Street, the Institut Montaigne, is asked to pipe up regularly. Plus TF1 and LCI’s Kojak.
A fortnight ago, there was a hit piece, featuring well off pensioners on the Atlantic coast who fund third world orphanages, so one would question why the pension is so generous.
If, as you say, France does reject neoliberalism, what will that even look like?
I am working on this…videos and blogs, and even a book, are coming.
There is also mass protest in Spain over levels of rent in particular and housing costs in general. It just needs Italy and Greece (the likely candidates) to join in and the EU will have a real jolt to its neoliberal foundations.
By the by, that is the root of my ambivalence about the EU. I voted to remain and on the terms we had it made sense. To go back in now would be to give up the one thing that could save us.
Agreed
Thank you.
Plus in Germany a fortnight ago.
Surprisingly BBC Newsnight did allow Yanis Varoufakis time to suggest this might be a watershed where France and Germany will have to lead the EU out of neo liberalism – so as to get public investment – and indeed private investment going again.<p>
Victoria Derbyshire’s growing impatience with his thesis became obvious as she tried to interrupt . But he did persist – and some of it got across to viewers. <p>
But unless this becomes more than an occasional blip in the flow of ‘there is no money’ messaging – most people won’t understand that there is an alternative.
I will look for a clip.
When state power faces UNITED opposition from citizens, then the state tends to ramp up the violence. Usually the state wins, with notable and bloody historical exceptions, including France. Sometimes, the state collapses from within, shortening the struggle and lessening the violence.
Without monetary sovereignty, which as you point out out, France does not have, then violence seems more likely. The state and the citizenry don’t seem to have many alternatives.
In terms of more peaceful solutions though, what COULD a French president do (whether Macron or Le Pen or someone else) to move expeditiously towards economic justice, with minimal violence, starting from where they are now (without monetary sovereignty)? Because that would seem preferable to cobblestones and water cannon, or worse.
First, they tell the EU where to get off
Second, they tell the ECB where to get off
Third, they treat the euro as their own currency if need be and issue greenbacks…
This is people v money
With neoliberalism failing in France, it’s surely time for MMT.
This would require simultaneously getting a majority of the other EuroZone members to put a little oil on the metaphorical money printer, but Macron is a charmer and could pull it off. Heck, he’s such a good negotiator he got two beneficial agreements with the UK over small boat migration.
There are videos coming on this.
I really hope so and think there’s much leverage in coupling this: ‘neoliberal poly crisis’ to drive home a clear narrative of cause and effect in people’s minds.
The question is can Melachon unite students and workers as Cohn-bendit did in May 1968. The police violence will further enrage the French people who have had enough.
Agreed
Thank you, both.
I agree with that.
The Melenchon team is trying to do that and it seems to be working as parents and workers join in, but Melenchon is getting the Corbyn treatment, the very same attack lines. It worked on the hapless Corbyn, but the French left is made of sterner stuff. There’s also support from Gaullists. I watch French tv news almost daily.
Readers should note hat French state broadcasters are run by Macron supporters. The private ones and newspapers are oligarch owned.
I’m really grateful to see you commenting on this situation. I’ve grown quite sick to death of being lied to about the bond markets and the Neo-liberal infatuated, ex Goldman Sachs alumni ran ECB. This post brings much needed relief.
I’ve always admired the French, and I’m a self confessed Francophile. France has been portrayed as dragging its feet into so-called ‘modernism’ and we over here in Britain encouraged to enjoy their suffering (I recall one magazine calling the French resistance to Thatcherism as ‘Le Big Sulk’) as though they were just staving off the inevitable (the inevitable being a society that is American in nature with its huge disparities of wealth and poverty).
I remember visiting in the mid 1990’s, and then from the 2000’s beginning to see things like begging, tent city’s and the decline and waste in the city environments increase. Rather as I have done over here from the 1980’s.
The French people I know are split between more Thatcherite reform and the far right to a desire to return to more truly republican ideals. I have tried to warn them not to be taken in by the former. But the state has been pulling back, and when that happens, well we know what austerity style policies do, they destabilize people.
My view is that either France – consorting with others – overrides the ECB view/stranglehold or it just starts printing francs again.
In Tolkien’s Lord of the Rings, there is the ‘one ring’ that binds them all: in this story, the equivalent is the EU’s euro. In Tolkien’s story, the one ring is cast into the fire to destroy its power. Well, there you go…………………..Bonne Chance, mes ami, bonne chance.
A neat allegory
Thank you, PSR.
+ 1.
One hopes this community’s French contingent, anrigaut and Geof, pipe up.
I have met French Thatcherites, here and in France. They did not live here when Thatcher was PM and have only the MSM gloss as reference. It’s the same with her only fans outside the UK.
Readers may not know this. In early 2007, Sarkozy came to London to raise money for his campaign. I tagged along with a French friend and former colleague to one of his rallies. Macron did the same in 2016 and was hosted by Osborne. Osborne and Macron have been friends since and feed off each other. Osborne thought Macron could help install him as IMF boss, but Brexit scuppered that as the EU said it would prioritise EU candidates.
Macron lobbied for French firms Origin HR and Sodexho to get UK government contracts, the former to assess welfare claimants and their physical ability to work.
The pre-Brexit French community in London was big. The west and SW London residents tended to work in finance and were Thatcherite. The ones from elsewhere tended to be on the left. The French Thatcherites have long wanted to impose Thatcherism in France.
The le Pen family business is split. Marine and Bardella, whose anti-semitic outbursts have been glossed over, are flexible, pragmatic even. Marine’s niece, Marion, is neo-liberal, neo-con and a Trumper, unlike the more cautious aunt and Bardella. (Bardella, now going out with an Italian princess after splitting from another niece of Marine, has been getting too big for his boots, vide his speech at Reform’s conference, and upset the le Pen family. He won’t be the first potential challenger to family control. Megret, Gollnisch and Philipot, the last a leftist on economics, were ousted.)
Bill Mitchell has always maintained the EU is doomed to failure because of the central currency restricting the members’ fiscal sovereignty. But of course Europe was always doomed anyway because of it’s paucity of natural resources. Plunder is the only way we keep going.
Yanis Varoufakis was on Newsnight last night pointing out that the possibility of the EU laying down the law on fiscal rectitude to France is of a totally different magnitude compared to what he described as the blackmailing of Greece after 2008. It’s just not going to happen, in his view.
I don’t say how they could do it.
Thank you, both.
The Bank of France, led by a Macron crony, entered the fray a few weeks ago when the former head of Lazard, Matthieu Pigasse challenged the orthodoxy along the lines Richard does and supported Melenchon and leading academic economists came out in support.
The ECB and Commission have stayed out so far, relying on local proxies.
I agree it’s an order of magnitude, but times have changed. There’s new thinking, for example our gracious host Richard. We have also had Brexit, covid, the wars on Ukraine and Iran etc.
I’m francophone, have family and friends in France, studied and worked there, and visit a few times a year. Some ancestors left there for Mauritius in the 18th century. Macron squeezed narrowly into the second round in 2017 and won by default in 2017 and 2022. He’s part of the deracinated elite that dominates the west. He was never the popular figure that the western MSM portrays. Readers may recall the yellow vest protests in the late teens. That discontent never went away.
Mum and I got caught up in one protest, the one when 1% eaterie Fouquet’s was burnt. I was working in Paris. Mum visited me for a long week-end. On the Saturday, we went to the (jump) races at Auteuil to escape the protest. On our way back to where I was staying, near the Arc de Triomphe and Fouquet’s, protestors (of all ages and classes and communities and ethnicities, often generations of a family, something that struck us) were running away from riot police. As we walked up, not quite knowing what was going on, and tried to avoid the crowd, the thugs in blue or black, i.e. police, tear gassed the vicinity.
Exactement!
What will the ECB do – send in the army? Whose army? To one of the founding countries? And the ECB is willing to sacrifice this country (France) on the altar of Neo-liberalism?
I think that only sovereign MMT – with a tax and planning policy to suit – can sort this out really.
Reflecting on what I have known about France over the years, I think that they got a lot of things right domestically anyway, it was an interventionist social state working towards some sort of solidarity in my view – the total antithesis of Margaret Hilda Thatcher. However, the ideas of the creature from Grantham have sadly continued to move East as the post war institutions have withered.
Thank you
A French commentator opines that the French strict no mobiles at school rule has resulted in the students taking more notice of the state of school buildings, the lack of teachers, the impact of AI etc that they are talking to each other and now complaining about their lot.
An unexpected outcome of a state’s control of technology.
Fascinating. Thank. They looked up and paid attention. Both are prerequisites for change.
I saw a banner amongst the French protestors yesterday:
1789 – 1968 – 2026
Long memories those French.
Vive la revolution!
🙂
The situation in France is very fragile. The widespread support for LePen and the RN is not just (or even mainly) about economic issues. There is concern about the increase in drug trafficking, about lax and unequal application of the law (and long delays in the justice system), about child abuse. Some regions are very conservative and resent the influx of foreign customs. Some of these issues relate to the economy, sure, but a fierce longing for the “old ways” is important and many people see an authoritarian clampdown as the answer and will vote RN. Curiously this can exist side by side with more progressive parts of society. But I fear next year’s elections could be a very dangerous time.
I think you are right.
In Germany we do also had a left-wing party, “Die Linke”, who won the regional election in Berlin.
The main topic was the expropriation of Housing companies that have more than 3000 appartements.
People WANT that change absolutely, they SEE or at least FEEL the failing of neoliberalism.
And that topic is convincing for a lot of people (at least in the cities) because it’s so visible.
So, also here in Germany the positive change is possible.
There’s a lot of resistance against that, though.
And that, in all its disgrace, even includes other major left-wing parties.
This comes with weird allegations of antisemitism and the fearmongering about “Today it’s this company, tomorrow they’ll get your house!”.
The neoliberal virus tries a whole lot of illogical and useless stuff to survive.
I hope France will be a bright beacon for a courageous state with a politics of care that then spreads out fast.
The soil is obviously there.
It has been said to me that the French have some idea of the life they want to lead – hence the Country shutting down for August so whatever else is happening the Government is faced with addressing some practical questions not ‘I dont know what I want but I want it now’
Varoufakis pointed out on Newsnight that France is “too big to fail” for the EU. Although he went on his motorbike to meet up with the head of the ECB in Frankfurt he was bullied into submission to austerity because Greece was such a small country compared with France, Germany, Italy etc.