Le Pen And AfD Join Forces: Heavy Headwinds For Von Der Leyen's EU Mega-Budget

Le Pen And AfD Join Forces: Heavy Headwinds For Von Der Leyen's EU Mega-Budget

Submitted by Thomas Kolbe

A breather in the European bond market.

After yields on ten-year French government bonds brushed against the 5-percent mark in late trading on Friday, the situation calmed again at the start of the week. Two politically significant developments, one from Germany and the other from France, apparently acted like circuit breakers as they are known in the markets.

On Monday, an AfD strategy paper was circulating. In this pamphlet, the party’s European policy experts had apparently agreed on a strategic shift in their approach to the EU and monetary policy. There was no longer any talk of leaving the euro system or even of a Dexit, Germany’s departure from the European Union.

Quite the opposite: The EU is to be transformed into a federation of sovereign nations, with a focus on the internal market, effective protection of the external borders, and coordination among member states on security matters. In general, the goal should be to return political powers to the nation-states — all sensible measures to consolidate the EU’s completely out-of-control expansionism.

As for the shaky euro currency, the authors of the paper argue that it should rest on a solid foundation of individual states taking responsibility for themselves and assuming their own liabilities. Whether this can put an end to the tiresome problem of shifting fiscal responsibility onto German taxpayers remains to be seen.

Important for opponents of fiat money: According to the AfD, the European Central Bank should have its operational scope significantly restricted. Specifically, the paper calls for an end to “indirect ECB financing of governments,” the settlement of Target balances, and an insolvency regime for member states. A ban on financing government debt with the central bank’s money printer would be a revolution in monetary policy. It would be the end of ideological experiments. Politics would have to abandon vehicles such as the Green Deal, since its economic stillbirths can only be kept alive with the help of manipulated borrowing costs. In light of the latest bond turmoil, any means would be justified to leave this destructive path behind.

All of this points in the right direction, but avoids a break with existing power structures. After all, nothing frightens the markets more than uncertainty. A clear horizon is what they are looking for, which is why the news from Germany likely contributed to a collective sigh of relief in the bond market.

France’s opposition leader Marine Le Pen of the Rassemblement National sounded similarly tame. On Tuesday morning, Le Pen presented her plans to consolidate France’s ailing public finances.

A partial return to the Maastricht criteria, with annual new borrowing below three percent of GDP, is what she is seeking, Le Pen said. That, however, would require a revival of economic activity, in an economy that, much like Germany’s, is bloodless and starved of innovation under Brussels’ climate diktat. The country is heading toward sovereign bankruptcy, the politician said, and by 2032, hard spending cuts are supposed to generate savings of €140 billion.

After just 15 months in office, Le Pen plans to achieve a balanced primary budget, meaning a surplus before interest payments. As in Germany, Le Pen plans to enshrine a debt brake, her “golden rule,” in the constitution by referendum — and we have known since Chancellor Friedrich Merz single-handedly executed the debt brake with an already-defeated Bundestag and the special fund exactly what such political promises are worth.

Le Pen also had a very special message for Ursula von der Leyen. France’s net contributions to the European Commission should immediately be cut back to the level of the early 2000s, to five billion euros. A reduction of around 64 percent.

If Le Pen wins the election, she could put herself at the head of a consolidation movement that clips Brussels’ expansionist wings. Von der Leyen is planning a two-trillion-euro mega-budget for the period from 2028 to 2034 - a hyperbolic expansion of 60 percent, which would send Germany’s contribution to the debt club soaring from around €27 billion today to €40–45 billion a year. Even the otherwise debt-friendly Friedrich Merz is trying to rein in this expansionist drive somewhat. Media theater, without a doubt, but the chancellor senses that there is no longer any backing for this policy.

Ultimately, the question is whether Europe will increasingly pool its debt in eurobonds, into a common pool consolidated under the roof of the European Commission and systematically monetized by the European Central Bank. A shell game: shifting the costs of debt-making onto EU taxpayers, who ultimately become the pack animals of centralism, central planning and state-run economics — all systems that consume more billions year after year.

Perhaps the bond market received reassuring signals from the European right. If it is able to put the brakes on this fiscal crash course, a consolidated EU focused on its core responsibilities could take shape. The AfD paper offers important indications of a realistic path toward that goal.

Tyler Durden
Sat, 10/17/2026 - 07:00