There were “gasps of horror” and tears from Marine Le Pen’s supporters following an “unexpected left-wing victory” in the second round of France’s parliamentary elections, which thwarted her efforts “to bring the far-right to power”, says the Financial Times.
The result represents a “resounding success” for the co-ordinated strategy against the National Rally (RN), which saw centrist and left-wing candidates withdrawing in order to encourage tactical voting against Le Pen’s party.
It was pushed into third place with 143 seats, while president Emmanuel Macron’s Ensemble coalition got 159 and the left-wing NFP topped the polls with 180 seats. Still, this gives the RN significantly more than the 88 MPs it had previously, and leaves France in “limbo”, and no one party with an overall majority.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
What does the French election mean for France's stability?
The hung parliament, with three powerful blocs, constitutes “uncharted waters” for France, says Charles Bremner in The Times. There is precedent for “cohabitation” between a left-wing PM and a more conservative president, but the NFP bloc is so divided it can’t agree on a leader. Macron considers Jean-Luc Mélenchon and his France Unbowed, the largest party in the NFP, as “every bit as dangerous” as Le Pen’s RN.
This leaves Macron scrambling to attempt to “forge a working coalition between his centrists and moderate left-wingers”, which means that “long negotiations of a kind not seen in France for decades” are expected. There is “no clear or immediate path” to a stable government, so any coalition that does emerge is likely to be solely “designed to keep the machinery of government running rather than to enact big reforms”, says The Economist.
Such an arrangement would at least “bring stability”, something that would be welcomed by the markets. However, it might also lead to a backlash that boosts the extreme left and right – “French voters are already distrustful of Macron’s outgoing technocrat-heavy team”.
The impact on Europe
France’s expected post-election “paralysis” is also likely to temper any relief felt in Brussels at the results, say Barbara Moens and Jacopo Barigazzi for Politico. Eurocrats will be “delighted” at the relatively poor performance of Le Pen, but they will be worried by the anti-EU rhetoric coming from both the French left and the right. They will also be concerned that an inability to carry out further fiscal reforms will lead to economic “stagnation” and a worsening financial situation, resulting eventually in a confrontation between Paris and Brussels over the French deficit.
Macron’s authority and influence has been “greatly diminished”, which is bad news for those who support his belief that Europe, in an “overheating” world, needs to show “more unity, more coherence, more power”, says Timothy Garton Ash in The Guardian. It is also unfortunate for Ukraine, given that Macron was “the most influential west European voice in favour of increased support” for the “embattled” country, whose fate still hangs in the balance. Macron has “stabbed both himself and Europe in the back”.
This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.
-
Tycoon Truong My Lan on death row over world’s biggest bank fraudProperty tycoon Truong My Lan has been found guilty of a corruption scandal that dwarfs Malaysia’s 1MDB fraud and Sam Bankman-Fried’s crypto scam
-
Why undersea cables are under threat – and how to protect themUndersea cables power the internet and are vital to modern economies. They are now vulnerable
-
Ireland elections: what happens next?Ireland's election results seemed strangely familiar, as the two main incumbent parties retained power.
-
Rouble hits two-year low against the dollar – what does it mean for Russia's economy?New US sanctions have plunged the rouble to its lowest level since 2022. Why are investors spooked and how will this affect Putin's economy?
-
Has Javier Milei succeeded in transforming Argentina's economy?Javier Milei won an election last year on an “anarcho-capitalist” platform, promising to take a chainsaw to the overbearing and bloated state. How’s it going?
-
Brazil booms – but why do investors remain wary?Brazil is booming, but you wouldn’t think so from looking at the stock market. What's behind the market paranoia?
-
Europe’s deep creativity crisis – and how to fix itIn the US, small companies become big ones. On this side of the Atlantic, they don’t
-
Is Donald Trump's re-election a wake-up call for Europe?Donald Trump will turbocharge the US economy – and expose Europe's weakness
-
German chancellor Olaf Scholz's coalition collapses – what went wrong?EU Economy After Olaf Scholz fired a key minister, Germany's coalition has collapsed. But political turmoil in the country couldn’t have come at a worse time
-
Do we need central banks, or is it time to privatise money?Analysis Free banking is one alternative to central banks, but would switching to a radical new system be worth the risk?
