Author: Sean O’Connell, Graphics: Nina Tagliabue
The BRB Bottomline
If far-right candidate Marine le Pen becomes the next French president, what would her ambitions mean for the European economy—and for her country’s geopolitical ambitions?
To an informed watcher of the French first-round presidential elections on April 10, the results didn’t come as a shock. The polls rang broadly true: the Ministry of the Interior reported 27.8% for the centrist President Emmanuel Macron, 23.1% for the far-right candidate Marine Le Pen, and 22% for the far-left candidate Jean-Luc Mélenchon. That means France is preparing for a repeat of 2017 in its second, and final, round of elections. Macron and Le Pen will again face off for the rights to the Elysée Palace—and moderates around the world are holding their breath.
While the results may have been conventional, three things are clear to most observers. First, the old party structure in France is dead. Candidates from traditional parties, namely the Socialists and Republicans, received barely 5% of the vote. Second, former Mélenchon voters have a good chance of swinging the election in favor of either Macron or Le Pen. While most Americans might imagine that means a sure win for Macron, many on the French far left find Le Pen’s calls to protect the social state and support France becoming “a global power of peace” by leaving NATO more comforting than Macron’s perception as a big-business bourgeoisie lackey.
The third and most important takeaway from the election is that Madame Le Pen has a good chance of winning. Better than ever, in fact. The Economist projects her chances at 13%. For reference, U.S. pollster Five-Thirty-Eight projected Trump’s chances at 28.6% in 2016. She’s also polling at 46%, barely below Macron’s 56%.
So, if this heir to a right-wing dynasty becomes Présidente de la République, what would it mean for the global economy—and for European geopolitical ambitions?
The answer is a mix of it’s hard to tell and nothing good for the EU. Back in 2017, Le Pen attempted to take the presidency on a much harder-line foreign policy: pro France leaving the EU (Frexit), rhetorically vicious on immigration, and favorable to an alliance with Putin’s Russia. In fact, she claimed that the annexation of Crimea was the result of a democratic referendum shortly after her party took $12 million in loans from a Kremlin-backed bank.
Now, however, Le Pen claims “I’m no longer the big, bad wolf” as a result of public image softening during the 2022 election cycle. This is partly the result of image-creation while sticking to the same hardline policies as in 2017. She’s often pictured with cats or appealing to a maternal personality, and has decided to put her anti-immigration and Frexit policies before a national referendum, rather than enacting them unilaterally.
For all the bravado, her anti-globalization, anti-EU, anti-OECD stance remains broadly consistent, albeit more obscured to the French people. International observers aren’t so convinced, with Luxembourg’s acting Foreign Minister giving a rare public rebuke, saying her election “would not only mean a break away from the core values of the EU. It would also totally change its course”. Germany’s former Europe Minister was more direct: It’s either [Macron] or the downfall of a united Europe. It sounds a bit dramatic but that’s the way it is.”
Europe’s fears are probably justified. While Le Pen has backed down from encouraging an EU exit, she recently stated that although “I do not want to leave the EU. That is not my objective,” she believes, “The behavior of the EU in recent years is probably at the root of ever-rising French popular suspicion about the EU.” Euroscepticism is certainly alive and well in France, as it has been in many other European nations over the past decade. Yet, for all the complaints of the EU’s “remote, ineffectiveness”, only 39% have a negative view of the “EU’s voice in the world” and 53% remain “attached to Europe”, according to a study by the Institut de Lors.
Despite her platitudes against the EU’s behavior, her outward-facing economic and geopolitical policy remains largely in flux, probably a large reason for European moderate’s anxiety. One former French official noted, “Her foreign policy, to me, is either obscure or changeable depending on the circumstances.” However, Foreign Policy argues that Le Pen’s belief in French primacy over EU law and her previously stated interest in security and trade border controls “would come in direct confrontation with the European Union’s freedom of movement principles.”
In fact, Le Pen has consistently argued that the EU is significantly too integrated and powerful, favoring an alliance “of free and sovereign nations” and supporting de-regulated agricultural policy, limits on EU policy, and removing France from the EU Green Deal on carbon neutrality. She claims that “a large majority of French people no longer want the European Union as it exists today,” and, importantly, that “The euro is a major obstacle to the development of our economy.”
On the issue of EU economics, Le Pen has backed off from a 2017 anti-common currency stance. Yet, her senior economic adviser Philippe Murer noted she is still studying a return to an ECU currency basket of major, independent European currencies—something that hasn’t existed since the euro’s adoption in 1999. Murer argued, “With a return to the ECU, we could retain a trace of the euro.” Le Pen’s opponents call her anti-EU policies “Frexit in all but name” and argue that her policies combined with continued union membership would destroy the EU internally.
EU supporters aren’t the only one’s concerned about a potential Le Pen victory. White House officials, according to Politico, voiced concerns that “A possible victory by Le Pen, a Putin sympathizer, could destabilize the Western coalition against Moscow, upending France’s role as a leading European power and potentially giving other NATO leaders cold feet about staying in the alliance.” Le Pen supports France leave NATO command and has argued against cutting off Russian oil imports: “Do we want to die? Economically, we would die! We have to think of our people.” Some in the West believe this stance threatens to divide the anti-Russian sanctions system built up following the February invasion of Ukraine.
Sunday’s election results are thus already causing preliminary shifts in financial markets. Concerns over French debt—which is relatively high but currently buffered by forgiving EU policies—led some investors to dump their bond holdings after the election, “pushing 10-year borrowing costs to a seven-year high” based on a Bloomberg analysis. This is based on a view that if Le Pen wins, her anti-EU policies would weaken the euro’s exchange rate and increase the yields on bonds. Fears that Le Pen’s theoretical policy moves could reignite Eurozone concerns about Italian debt policy also caused a six-week bond spread peak.
With a testy financial market and nervous political establishment, it’s down to the voters to decide France’s next five years, and, maybe, the future of European policy. The French final election occurs on Sunday, April 24.
- Following the first round of French elections, Le Pen and Macron will face off in a tight race.
- Despite moderating her public image, Le Pen still holds fast to anti-immigration, anti-EU, anti-NATO, and protectionist policies.
- Many EU supporters and moderates are concerned over her policy platforms to restrict French borders and commercial actions and to favor French law over EU law.
- Le Pen remains evasive about her opinions on the euro, and though she supports the common currency in public, her chief economic adviser notes she is still considering a return to ECU currency baskets.
- Le Pen’s support of French removal from NATO command, and her stance against Russian gas sanctions, has concerned the White House and other governments hoping to show a united front against Putin.