French banks float state role in election campaign funding to reassure lenders

France's banking sector has floated the idea of state-backed support for presidential campaign financing, as political parties – notably the far-right National Rally (RN) – struggle to secure loans from commercial lenders.

Speaking on the BFM Business TV channel on Monday, Daniel Baal, president of the Fédération bancaire française (FBF), suggested that early public intervention could help.

His proposal comes with less than a year to go before France's next presidential election, and amid growing concern over how candidates fund increasingly costly campaigns.

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State guarantees

Baal argued that the state could step in either by providing a “first-demand guarantee” to banks – ensuring swift repayment in the event of a default – or by directly advancing funds to candidates. Such measures, he said, would reduce the perceived risks that have made banks reluctant to lend.

The issue has been brought into sharp focus by the RN's ongoing difficulty in securing financing.

Despite its strong electoral performance in recent years, the party is yet to find a lender willing to provide the €10.7 million corresponding to the maximum reimbursable campaign expenditure for candidates who reach the second round of the election.

According to Baal, lending to presidential candidates represents a fundamentally different kind of risk compared with loans to households or businesses.

While the French state reimburses a large share of campaign costs for candidates who secure more than 5 percent of the vote in the first round – a threshold the RN has comfortably surpassed in past elections – those repayments are not guaranteed outright.

They depend on the official validation of campaign accounts, a process that can introduce uncertainty for lenders.

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History of setbacks

Baal pointed to the example of former president Nicolas Sarkozy, whose 2012 campaign accounts were rejected, as a reminder that even leading candidates are not immune to such setbacks.

For banks, this adds an additional layer of risk that can make political lending unattractive.

For the RN, the stakes are particularly high. The party lacks significant self-financing capacity and is already engaged in what its officials describe as a “sustained” effort to repay existing debts, most of which are owed to private individuals.

“We are making approaches, but for now French banks are refusing to grant a loan that honestly carries only minimal risk,” said party president Jordan Bardella last week, expressing frustration at the impasse.

Baal's proposal is unlikely to settle the debate on its own, but it highlights a broader tension in French politics – balancing fair access to campaign financing with the financial prudence expected of lenders. 

(with newswires)