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Russia’s federal banking monitor has launched steps to recover a loan issued in 2014 to the French far-right party, adding to Marine Le Pen’s financial woes as she gears up for looming election battles.
Another election campaign, another frantic fundraising effort for France’s chronically cash-strappedNational Front (FN).
The Eurosceptic, anti-immigrant party had heaved a sigh of relief in September 2014, when it secured a €9 million loan from Russian lender First Czech-Russian Bank (FCRB).
The decision to take out the loan, even as the rest of Europe was slapping sanctions on Moscow over its actions in Ukraine, kicked up a storm in France, where it was widely seen as evidence of Le Pen’s growing coziness with the Kremlin.
The FN is France’s only party to have hailed Russia’s annexation of Crimea. It regularly praises Russian President Vladimir Putin as a “patriot” and a bulwark for traditional European values.
But then the Russian bank went bust last year, and Le Pen lost a financial lifeline.
According to Russian and French media reports, the Moscow-based Deposit Insurance Agency (SVA), which administers FCRB’s assets and debts, has now started legal proceedings to get the money back.
Responding to the report, the FN’s treasurer, Wallerand de Saint-Just, said: “The Russian state has taken care of things and there is no reason why the terms of the contract should change.”
He told French daily Le Monde that the FN was due to pay the loan back in a lump sum in September 2019.
Should Russia push for earlier repayment, it could hardly come at a worse time for the far-right party, which is struggling to find the cash needed to fund its campaign for high-stakes elections in the spring.
Le Pen is tipped to storm into the second round of France’s presidential election, and pollsters are refusing to rule out a shock win in May.
Buoyed by recent successes in regional and European elections, her party is hoping to clinch at least 15 seats in parliament, up from the current two. Some experts have said it could win as many as 60.
But as the FN’s ambitions have soared, so have its bills.
Last spring, de Saint-Just said the party had less than half the €40 million required for the campaign.
He blamed the shortfall on French banks’ refusal to lend money to the FN, adding that he was forced to apply to 45 foreign banks instead.
Le Pen senior to the rescue
Complaints about the dearth of French lenders have long been a fixture of the FN’s campaigns – and of what critics describe as its self-victimisation.
Inevitably, the FN’s foes have pounced on the irony of a nationalist party that is dependent on foreign funds to stay afloat.
There are structural reasons for the party’s chronic funding problems. It has neither enough due-paying members, nor enough due-paying elected officials, to match its ambitions.
The country’s two-round electoral system has long shut it out of office, depriving it of the largest share of public funding.
As a result, the FN relies on wealthy donors, and on loans issued by the political fund of Le Pen’s fatherJean-Marie, the party’s co-founder and longtime leader, to plug the gap.
Le Pen’s attempts to detoxify the extremist party have soured relations with her father, who has been repeatedly convicted of inciting racial hatred, eventually leading to his eviction last year.
Yet despite the highly public spat, the FN confirmed last week it would borrow another €6 million from Le Pen senior’s fund.
The eurosceptic party’s other fundraising efforts have also raised eyebrows in France – and in Brussels.
Investigators are currently probing suspicious loans paid to FN candidates by affiliated group “Jeanne”, set up by party leader Marine Le Pen and named after French heroine Joan of Arc.
They suspect that “Jeanne” deliberately overcharged for campaign kits – including posters, flyers and stickers – in order to increase the amount the French state would have to reimburse.
Under French law, parties that win more than 5 percent of the popular vote in national elections see most of their campaign expenses reimbursed by the state.
Le Pen’s party also faces a probe into suspected abuse of EU funds by its sizeable delegation at the European Parliament.
Prosecutors are investigating whether the FN used assistants paid by the European legislature to work on its campaigns in France.
OLAF, the EU’s anti-fraud watchdog, has already asked the European Parliament to recover €339,000 from Le Pen as part of the investigation. Her party has denied any wrongdoing.