Far-right win leaves France amid shock and chaos
The author is a Reuters Breakingviews columnist. The opinions expressed are his own. Refiles to add dropped word in second paragraph.
By Pierre Briancon
LONDON, June 30 (Reuters Breakingviews) -France is fast heading towards a year of political, economic and maybe financial chaos. After the first round of parliamentary elections on Sunday, the prospect of a far-right government commanding an absolute majority of seats in the National Assembly can no longer be ruled out. Given the risks posed by the platform of Marine Le Pen’s Rassemblement National, the alternative – a political stalemate and unstable government – might be preferable.
RN received more than a third of the national vote but the final composition of France’s main house of parliament depends on political horse-trading. In next Sunday’s second round the left, for now united under a New Popular Front banner, and the alliance supporting President Emmanuel Macron have to agree on one candidate with the best chance of succeeding in each district. If they don’t or voters don’t follow their instructions, far-right candidates, who came in first place in an unprecedented number of constituencies, will be elected.
If Jordan Bardella, RN’s would-be prime minister, fails to win a majority of seats, France will enter long months of political crisis. Macron’s clout would be reduced to a minimum following the failure of his gamble to call snap elections after his party was trounced in the European Parliament elections. According to some projections, the president would be able to count on fewer than 100 MPs in the 577-strong Assembly. That would weaken his ability to play kingmaker, even if he rallies MPs from the centre-right or the centre-left to form a minority government.
Such a government would soon be defined not by what it does but by what it is unable to do. It would be marked by constant bickering, stasis and impotence on urgent questions such as how to reduce a budget deficit running at more than 5% of GDP. And it would struggle to define what role France should play in the European Union on areas like the policy towards China, Ukraine or the green transition. Macron cannot call new elections for another year and his current term runs until 2027.
A far-right majority government might bring the certainty that markets sometimes favour. It could, however, trigger another kind of political instability if opponents take to the streets to protest the prospect of a far-right administration ruling Europe’s second-largest economy. And it may seriously spook investors once it unveils its first important decisions, probably in the autumn: Bardella’s platform is rich in tax cuts and unfunded promises.
Less than two months ago Macron hosted his annual powwow of top global CEOs and celebrated 15 billion euros of new investments pledged by the likes of Amazon AMZN.O, Microsoft MSFT.O and AstraZeneca AZN.L. “Choose France”, he exhorted them. If they were asked today, they might choose to pass instead.
Follow @pierrebri on X
CONTEXT NEWS
Marine Le Pen’s far-right National Rally (RN) party won the first round of France’s parliamentary elections on June 30, exit polls showed, but the final result will depend on two days of horse-trading before the run-off on July 7.
The RN was seen winning around 34% of the vote, exit polls from Ipsos, Ifop, OpinionWay and Elabe showed shortly after voting ended at 8:00 p.m. local time.
The left-wing coalition New Popular Front was projected to win around 29% of the vote, with the centrist alliance Together, supporting President Emmanuel Macron, seen winning between 20.5% and 23% of the popular vote.
Graphic: Spread between yields of French and German 10-year bonds https://reut.rs/3W5Hsl2
Editing by Francesco Guerrera and Oliver Taslic
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
