France finds itself caught between Mélenchon and ‘Melonisation’

In a recent book, the analyst Mario Seminerio described Italy as Europe’s ‘Patient Zero’: the vanguard, or rather, the testing ground for economic ills – massive debt, economic stagnation, an unsustainable welfare system – and the populist shortcuts to tackle them. The description could not be more apt when one considers the debate in France, where the far-left candidate Jean-Luc Mélenchon proposes to resolve France’s fiscal problem by cancelling the debt. The leader of La France insoumise, advised by the rock ’n’ roll banker Matthieu Pigasse, proposes cancelling the French public debt held by the ECB: “Eighteen per cent is held by the Bank of France. All we have to do is go there, take it and burn it,’ said Mélenchon. This is a scenario we’ve seen before in Italy in 2018, when populist forces won the elections with the aim of defeating austerity and breaking through budgetary constraints. The proposal is the very same one contained in the draft M5S-Lega government contract (“to write off 250 billion in BTPs from the ECB’s balance sheets”), which sent the spread soaring.

The same proposal was subsequently revived in 2020 by David Sassoli of the PD. Nothing came of it, because such a move is prohibited by the European Treaties and, consequently, would spell the end of the euro. In any case, for a country with a deficit of 5.1 per cent – and projected to reach 5.7 per cent by 2027 – the proposal reveals an intention not to service its debts, with immediate repercussions on interest rates: default thus risks becoming a self-fulfilling prophecy. The other consequence, on a political level, is that it makes Marine Le Pen’s far right – currently leading in the polls – appear more credible: her heir apparent, Jordan Bardella, has dismissed the idea as ‘nonsense’. It is no coincidence that, to describe the mainstreaming of the Rassemblement National, the term ‘melonisation’ is used in France: a political process already pioneered by Patient Zero.