Daily Reports
Paris – Today, all eyes are on France as crucial new elections are held. The results will determine the future political course: Will Marine Le Pen's radical right win the majority in parliament, dealing a heavy defeat to President Emmanuel Macron?
Polling stations in France are open from 8 a.m. to 8 p.m. on election day. Initial forecasts based on exit polls will be published as early as 8 p.m., providing a reliable picture of the eventual outcome. Official results of the first round are expected by Monday morning, July 1.
However, the announcement of the official results on June 30 does not conclude the electoral process. Run-off elections will take place on Sunday, July 7, if no candidate receives an absolute majority in a constituency. The two strongest candidates from the first round will compete in the run-off, and the candidate with the most votes wins the constituency.
Before the elections, parties have aligned into three camps: Rassemblement National (RN) around Marine Le Pen, the left-green camp New People’s Front, and Macron’s liberal camp. Polls suggest the far-right and left-wing camps are neck and neck with around 30 percent each, while Macron's camp is far behind.
If the RN achieves an absolute majority, President Macron would have to appoint a candidate from its ranks as the new prime minister. The current Prime Minister, Gabriel Attal, belongs to Macron's Renaissance party. The RN is running Jordan Bardella for the office of Prime Minister.
Since Macron announced the dissolution of Parliament on June 9 following the National Rally's success in the European elections, France has experienced political and economic shocks. Interest rates on state debt have risen, and the Paris Stock Exchange has declined.
Business confidence has plummeted, with only 19% of managers confident about the French economy's prospects over the next 12 months. Many business leaders are postponing investment projects due to the political uncertainty.
The CAC 40 index fell by 6.42% this month, its worst performance since June 2022. Interest rates at which France borrows have risen, and the gap between French and German borrowing rates is at its highest since 2012.
Strategic experts at Citi have developed three scenarios for market development based on the election results: a centrist coalition or minority government led by the National Rally, continued financial risks and political uncertainty, or an 'extremist' government implementing radical measures.
Far-right leader Jordan Bardella has shifted his stance on pension reform and energy policies during the campaign. The left-wing coalition aims to freeze prices of basic goods and increase the minimum wage, but business leaders are overwhelmingly against such measures, fearing inflation and economic instability.
- The results of the elections will significantly impact not only France's political landscape but also its economic stability. The business community is closely watching the outcome, as the new parliament's composition will influence economic policies and reforms.
- The uncertainty surrounding the election results has already led to a decline in business optimism and a volatile financial market. The decisions made by the new parliament will be crucial in determining the direction of France's economy in the coming years.
