France’s Finances to Come under Further Strain Whoever Wins Election

 A voter prepares to cast a ballot at a polling station for the first round of the parliamentary elections in Paris, Sunday June 30, 2024. (AP)
A voter prepares to cast a ballot at a polling station for the first round of the parliamentary elections in Paris, Sunday June 30, 2024. (AP)
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France’s Finances to Come under Further Strain Whoever Wins Election

 A voter prepares to cast a ballot at a polling station for the first round of the parliamentary elections in Paris, Sunday June 30, 2024. (AP)
A voter prepares to cast a ballot at a polling station for the first round of the parliamentary elections in Paris, Sunday June 30, 2024. (AP)

Already under scrutiny from ratings agencies, financial markets and Brussels, France's public finances are likely to come under more strain no matter what the outcome of a snap parliamentary election, which starts with a first round of voting on Sunday.

The main parties have all promised new spending but their plans to pay for it are short on detail and do not always stack up.

Polls indicate that the far-right National Rally (RN) will come first, followed by the New Popular Front left-wing alliance and President Emmanuel Macron's Together trailing in third.

The outgoing government had promised to cut the budget deficit from 5.5% of Gross Domestic Product last year to a European Union ceiling of 3% by 2027 - an objective that may be unattainable after the vote, which concludes with a second round on July 7.

FAR-RIGHT NATIONAL RALLY

If it forms a government, the RN wants as soon as July to cut value added (VAT) sales tax on energy, which it says would cost 7 billion euros for the rest of this year and 12 billion in a full year.

The RN says it would be financed by obtaining a 2-billion-euro rebate on France's EU budget contribution, although the bloc's 2021-27 budget has long since been voted into the books.

The party is counting on big gains from ramping up a levy on exceptional profits from power producers and replacing a tonnage tax on shipowners with normal corporate tax, although that sector's bumper profits of recent years is likely to subside.

The RN also wants to annul a cutback in the duration of unemployment benefits due from in July, a move that the outgoing government says would cost 4 billion euros.

Further out, the RN aims to index pensions to inflation, reduce the retirement age to 60 for people who started work at 20 or before, exempt some workers under the age of 30 from income tax and raise teacher and nurses wages.

It also wants to go ahead with cuts in local business taxes that the current government has had to suspend because they could not be afforded.

The RN would also scrap a 2023 increase in the retirement age to 64 from 62, replacing it with a more progressive system which remains to be specified. The party says it would stick with existing plans to cut the budget deficit in line with France's commitments to EU partners.

Targeting welfare spending on foreign citizens and cutting red tape, the RN has pledged to go head with 20 billion in budget savings this and next year, which the current government has struggled to come up with and detail.

It further wants to renegotiate the European Central Bank's mandate to give it a new focus on jobs, productivity and financing long-term projects.

LEFT-WING NEW POPULAR FRONT

The New Popular Front (NFP) alliance says its first moves would include a 10% civil servant pay hike, providing free school lunches, supplies and transport while raising housing subsidies by 10%.

It says that it can cover the cost by raising 15 billion euros with a tax on superprofits, which remains to be detailed, and reinstating a wealth tax on financial assets, also for 15 billion euros.

Additionally the group wants to freeze prices of basic food items and energy while raising the minimum wage by 14% with subsidies for small firms that cannot otherwise cope.

The alliance would then in 2025 hire more teachers and healthcare workers, step up home insulation with subsidies, boosting public spending by an additional 100 billion euros.

It says the cost would be covered by closing tax loopholes, making income tax much more progressive, restoring the wealth tax on financial assets and setting a maximum inheritance for families of 12 million euros.

From 2026, public spending would reach 150 billion euros annually, notably by increasing the culture and sports ministries' budgets to 1% of GDP.

The NFP would also scrap the 2023 increase in the retirement age and wants to eventually reduce it to 60. The alliance says the extra spending would be financed by tax hikes and stronger growth, but it does not plan to reduce the budget deficit and rejects the EU's fiscal rules.

CENTRIST 'TOGETHER' ALLIANCE

While Macron's party is committed to cutting the budget deficit to 3% of GDP by 2027, institutions from the national auditor to the IMF had serious doubts even before the snap election was called.

Since then, the party has pledged to cut power bills by 15% from 2025 and to match pension hikes to increases in inflation. It says that it will raise public sector wages, but its program does not say by how much.

The party remains committed to no broad tax hikes and will increase the amount parents can gift children tax-free.



Turkish Central Bank Total Reserves Fell Nearly $6 Bln Last Week, Bankers Say 

People walk with the Suleymaniye Mosque in the background ahead of the holy month of Ramadan in Istanbul, Wednesday, Feb. 18, 2026. (AP)
People walk with the Suleymaniye Mosque in the background ahead of the holy month of Ramadan in Istanbul, Wednesday, Feb. 18, 2026. (AP)
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Turkish Central Bank Total Reserves Fell Nearly $6 Bln Last Week, Bankers Say 

People walk with the Suleymaniye Mosque in the background ahead of the holy month of Ramadan in Istanbul, Wednesday, Feb. 18, 2026. (AP)
People walk with the Suleymaniye Mosque in the background ahead of the holy month of Ramadan in Istanbul, Wednesday, Feb. 18, 2026. (AP)

The Turkish Central Bank's total reserves are expected to have decreased by around $5.8 billion last week to $206 billion, due to a eurobond redemption, bankers ‌said.

Three bankers ‌consulted by ‌Reuters ⁠calculated that net reserves ⁠decreased by $7 billion to $89 billion in the week ending February 20.

Bankers estimated that ⁠an increase in ‌gold ‌prices in the week ‌to February 20 ‌had an upward impact of around $1 billion on reserves. According to ‌the calculations, the central bank sold $3 ⁠billion ⁠in the market last week.

The reserve calculations are based on preliminary data from the central bank. Official data will be released on Thursday.


Despite Drop in 2025, Russian Oil Exports Exceed Pre-war Volumes

Russia relies on a shadow fleet of tankers to get past Western restrictions on its oil exports. Damien MEYER / AFP/File
Russia relies on a shadow fleet of tankers to get past Western restrictions on its oil exports. Damien MEYER / AFP/File
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Despite Drop in 2025, Russian Oil Exports Exceed Pre-war Volumes

Russia relies on a shadow fleet of tankers to get past Western restrictions on its oil exports. Damien MEYER / AFP/File
Russia relies on a shadow fleet of tankers to get past Western restrictions on its oil exports. Damien MEYER / AFP/File

While Russian oil exports dropped last year, Russia is still exporting higher volumes than before its invasion of Ukraine in 2022, researchers said Tuesday, calling for stricter sanctions enforcement.

The volume of Russian crude oil exports remained six percent above pre-invasion levels in the fourth year of the war, despite Western sanctions aimed at curbing Russia's "shadow fleet," according to a report by Finnish think tank Center for Research on Energy and Clean Air (CREA).

Russia's shadow fleet consists of ageing tankers, with often opaque ownership, used to circumvent sanctions imposed by the European Union, the United States and the G7 group of nations.

However, oil revenues, which are fueling Moscow's war chest, have dropped below pre-invasion levels, as Russia has been forced to adopt price discounts, the report said.

"We've seen a significant drop in Russian fossil fuel export earnings as a result of new measures and greater enforcement," Isaac Levi, a CREA analyst and co-author of the report, told AFP.

But he added that "there are still significant loopholes and areas that have been unaddressed by sanctioning countries", allowing volumes to remain high.

Loopholes include the false flagging of ships but also the issue of re-exportation of refined fuels made from Russian crude oil to sanctioning countries.

"We propose a ban of imports from any refinery or storage terminal that has received a shipment of Russian oil in the previous six months," Levi said.

- Crude to China, India, Türkiye-

Russian revenues from crude oil exports -- one of Russia's main exports -- decreased by 18 percent to 85.5 billion euros in the 12 months leading up to February 24, compared to the year before, according to the report.

Meanwhile volumes fell by six percent to 215 million tons, for the same period, according to the report.

Ninety-three percent of Russian crude was exported to China, India and Türkiye.

The report urged the EU and UK to "detain Russian shadow fleet vessels that pose huge environmental and security threats to European and UK coastlines".

The European Union lists 598 vessels suspected of being part of the "shadow fleet" that are banned from European ports and maritime services.

It also called for an end to Hungary's and Slovakia's continued imports of Russian crude oil.

The two countries, which were exempted from EU sanctions on Russian oil imports, imported 11 percent more Russian crude oil in the first 10 months of 2025 compared to the same period a year earlier, the report stated.


European Oil and Gas Stocks Hit Record High, Surpassing 2007 Level

The chimneys of the Total Grandpuits oil refinery are seen just after sunset, southeast of Paris, France, March 1, 2021. REUTERS/Christian Hartmann
The chimneys of the Total Grandpuits oil refinery are seen just after sunset, southeast of Paris, France, March 1, 2021. REUTERS/Christian Hartmann
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European Oil and Gas Stocks Hit Record High, Surpassing 2007 Level

The chimneys of the Total Grandpuits oil refinery are seen just after sunset, southeast of Paris, France, March 1, 2021. REUTERS/Christian Hartmann
The chimneys of the Total Grandpuits oil refinery are seen just after sunset, southeast of Paris, France, March 1, 2021. REUTERS/Christian Hartmann

The European oil and gas stocks index hit a record high on Monday, surpassing a previous record hit in 2007, helped in recent weeks by a rise in the price of oil, Reuters reported.

At 1450 in London the basket was up 1.5%. Oil and gas names have added 17% year-to-date versus a 6.5% rise for the pan-European STOXX 600 index.

Brent rose as high as $72.44 a barrel on Monday a six month high. It has risen nearly 19% so far in 2026 as investors worry about US military action in Iran.