The recent kickoff of France’s election campaign has been marred by violent nationwide protests against the far-right National Rally (RN) party. Hundreds of thousands of demonstrators took to the streets to voice their opposition to the rising nationalist sentiment promoted by party leader Marine Le Pen and her protégé, RN President Jordan Bardella. The protests, which saw around 250,000 people marching in Paris and other cities, were organized by labor unions and rights groups in response to RN’s record gains in the European Parliament elections.
With less than two weeks until the first round of voting on June 30, National Rally is currently leading in the polls with 35% support. This surge in popularity has sparked concerns among analysts, with Eurasia Group’s managing director for Europe, Mujtaba Rahman, warning of “major downside risks” if the far-right were to secure a majority. The prospect of RN dominating the political landscape in France is seen as uncharted territory and could have far-reaching implications for the country’s future.
In response to the threat posed by National Rally, President Emmanuel Macron made the bold decision to dissolve parliament after his party, Renaissance, suffered significant losses in the EU elections. Macron’s gamble to discredit RN’s legitimacy ahead of the 2027 presidential elections hinges on the hope of a fragmented parliament that would serve as a cautionary tale for voters. However, this strategy has not been without its consequences, as the uncertainty surrounding the elections has rattled financial markets.
The French stock market, represented by the CAC 40 index, experienced a sharp decline of over 6.2% last week, marking its worst weekly loss in years. The sell-off was fueled by concerns over the political instability caused by the upcoming elections. While some analysts believe that the market reaction was exaggerated and that certain sectors may be more vulnerable than others, the general consensus is that volatility is likely to persist until there is more clarity on the outcome of the elections.
As the election campaign unfolds, the political landscape in France remains uncertain. With RN leading in the polls and Macron’s Renaissance party trailing behind, the potential for a hung parliament looms large. Societe Generale and Deutsche Bank have both warned of ongoing uncertainty until the second round of voting on July 7 and possibly beyond. The lack of clarity regarding the fiscal and spending plans of the different parties adds to the anxiety surrounding the elections and keeps investors on edge.
The start of France’s election campaign has been marked by turmoil and unrest, with protests against the far-right National Rally reflecting a deep divide within the country. The outcome of the elections remains uncertain, with the possibility of a far-right majority posing significant risks for France’s future. As the campaign progresses, market volatility is expected to continue, further adding to the sense of uncertainty and apprehension among investors and voters alike.
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