Even if Macron wins the French election, there could still be chaos

"Relief sweeps markets" That was the headline on the FT today "as centrist Macron secures place in French run off" a run off that he is expected to win decisively. French equities soared; French government bond prices rallies; and the euro popped up to its highest level against the dollar in five months.

This all comes against a background that to many suggests the return of some kind of stability to Europe. Dutch voters also recently rejected a populist for a centrist and there are signs of economic growth across the EU.

The hope within the establishment at least is that we are back to business as usual. We reckon the establishment might be in for something of a shock. This is not business as usual.

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In the 60 years since Charles de Gaulle founded the French Fifth Republic, this is the first time that neither of the mainstream parties managed to get a candidate into the second round of a presidential election. Populists and nationalists of various sorts took more than 50% of the vote between them in this first round. Franois Fillon who should have walked this election ended up with a miserable 19% of the vote. And the official Socialist Party is all but dead (like most left wing parties these days witness Labour).

The key point here is that, while Macron will win the run off, it could also end up a much weaker president than most think. Charles Gave of Gavkal reckons that much of Fillon's Republican electorate will stay home on the day rather than vote for Macron. "Similarly, the rump of the disenchanted Socialist grouping will likely see huge abstentions."

If Macron wins, but only on a 60/40 margin, and with a 40% abstention rate (this happened in 1969) he will have been elected with only a third of the electorate. This in France means he will be considered a "very weak president from day one."

Add to that the chaos this election will cause inside the parliamentary system which is still organised around "the two party structure of Gaullists vs Socialists" and you could conclude, as Gave does, that "far from decreasing, uncertainty in France just rose, as did the chance of the country becoming ungovernable."