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French mess

Jul 01, 2024

Emmanuel Macron will likely be remembered as a high-stakes political gambler who risked his own legacy by opening the door to the far right in France. The first round of the legislative elections has shown a clear outcome: both the far right and the far left have cornered Macron’s ‘Ensemble’. The only glimmer of hope is that the far right, with 33.2% of the votes, is at the lower end of the estimated range (33%-34.2%) and could be prevented from gaining an overall majority in the second round. This situation necessitates that Macron’s party swiftly forms an alliance with the far left, a prospect that we also find unappealing for France. As a week of uncertainty looms, the premium of French 10-year government bond yield reached a 12 year high compared to the German Bund before the weekend.

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