“At some point, she's going to have to disappoint someone. Either she will have to disappoint markets by saying, actually, what I committed to fiscally, I can't deliver, or she'll have to disappoint her electorate by actually saying, well, my commitment to fiscal orthodoxy means we have to put the pension age back to 65 or plus.”
Odd Lots · Money & Markets · October 2026
Vallée was describing Marine Le Pen's proposed constitutional fiscal rule, which he says would be stricter than Germany's debt brake. She hasn't said how she would deliver it, including on pensions. He thinks that gap can't last through the campaign.
Transcript
…of, you know, I think, politics in most Western countries, but, you know, politics in France in particular, where you actually have now two clear contenders, Le Pen and Mélenchon, coming from, you know, the opposite sides of the political spectrum and pretty much nothing of relevance in the middle.
…or fiscal stance? Because I see these headlines that, you know, she wants more public spending cuts, but then I also see headlines that are like, oh, and also... We're going to reduce the pension age again, which I always thought was, you know, one of the sources of fiscal weakness in France.
It's a very important question and a very difficult one because there has been different views expressed by the Rassemblement National on its fiscal policy. I think there's been a turn that was initiated by Jordan Bardella, which was to basically make the party or the political line a lot more fiscally orthodox. And he came up with the possibility of moving the pension age higher. And he kind of gave, I think, all the signals to French businesses and to markets that he could be compatible with a traditional sort of center-right neoliberal economic policy. Le Pen comes from a place where she, I think, is more committed to social spending. She's more committed to protecting pensioners. And so I think she hasn't quite made that U-turn. What's very interesting, however, is that last week, on October 6th, she presented a new and very bold fiscal rule that she would want to introduce in the French Constitution by way of a referendum. And that fiscal rule basically mandates a very significant fiscal adjustment. So she wants to bring the deficit back to the debt-stabilizing deficit. So that's roughly cutting the…
What do you mean by that? And tell us a little bit more about Mélenchon, some of the economic things he said. I think he's talked about like canceling French debt. Didn't he also have like he went after the French central banker, etc.? Talk to us a little bit more about those Varoufakis parallels…
The Varoufakis parallel is to illustrate the fact that Varoufakis actually had a lot of political support in Greece and in fact won the referendum that he called for, which was opposing the fiscal adjustment program. And yet he was not able to deliver on the fact that he had won that referendum.…
Maybe this is a good point to ask about the French bank. So in Eurozone crisis 1.0, and I'm hoping no more numbers come after that, but in the original Eurozone crisis, one of the worries was we got this sovereign bank doom loop, basically. So, you know, government bonds would sell off. European…
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