(Bloomberg) -- France’s Interior Minister Gerald Darmanin said the minimum wage could be increased, opening the door to a key proposal of the leftist bloc that’s vying for influence over policy in the next government.
Raising the floor on the basic wage known as the SMIC by around €200 ($217.64) to €1,600 a month net is a core proposal of the New Popular Front, which won the largest share of seats in a snap election two weeks ago, but not enough to govern alone.
“The increase in the minimum wage defended by the left is not a bad debate and we would be wrong to dismiss it,” Darmanin said in Sunday’s Journal du Dimanche. “The minimum wage can be increased: it would be a significant boost for working people who deserve it.”
Before Darmanin’s comments, there was little sign of common ground on the proposal among different political groups that have the potential to form alliances in France’s hung parliament.
The current Prime Minister Gabriel Attal and Finance Minister Bruno Le Maire have both said such a move would spark a wave of redundancies and create unemployment.
Bank of France Governor Francois Villeroy de Galhau has also warned that small businesses can’t afford to be burdened by an excessive increase in the SMIC that would immediately hurt employment. The central bank’s monthly survey already showed a sharp increase in uncertainty during the elections, partly as companies worried about labor costs.
It remains highly uncertain who will form the next government in France. The New Popular Front — which spans the far-left France Unbowed to moderates in the Socialist Party — is struggling to agree on a candidate for Prime Minister as some parts of the alliance refuse broader coalitions across party lines.
On Friday, the Socialist Party proposed a vote within the New Popular Front by Tuesday to settle the matter. But France Unbowed has rejected the idea and said it’s opposed to the Socialists’ candidate, veteran climate negotiator Laurence Tubiana.
Even if the left settles on a candidate, President Emmanuel Macron is free to choose somebody else. He can keep the caretaker government in place for several months until greater consensus emerges in the renewed National Assembly.
Elections to key posts in the lower house have not delivered much more clarity. On Saturday, France Unbowed scored a victory as lawmakers reelected a senior member of the far-left party to head the National Assembly’s powerful finance committee. But that came after Macron’s party defeated the left in a vote that returned centrist Yael Braun-Pivet to the presidency of the house.
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