France is quickly approaching a year of economic, political, and maybe financial instability. It is now impossible to rule out the prospect of a far-right government with an overwhelming majority of seats in the National Assembly following the first round of legislative elections on Sunday. A political deadlock and an unstable government may be preferable to the risks associated with Marine Le Pen's Rassemblement National agenda.
RN won over thirty percent of the national vote, but political horse trading will determine the ultimate makeup of France's upper house of parliament. The coalition behind President Emmanuel Macron and the left, which is currently unified under the New Popular Front banner, must decide which candidate has the best chance of winning each constituency in the second round next Sunday. Far-right candidates who won first place in a record number of constituencies will be elected if they don't or if voters refuse to comply with their instructions.
France would face protracted months of political turmoil if RN's prospective prime minister, Jordan Bardella, is unable to secure a majority of seats. Macron would have very little influence going forward after his party's disastrous performance in the European Parliament elections, and his risky attempt to call early elections failed. Less than 100 MPs would be available to the president in the 577-member Assembly, according to certain estimations. That would make it more difficult for him to act as kingmaker, even if he manages to assemble centre-right or the centre-left MPs to create a minority government.
Soon, such a government would be identified more by its limitations than by its accomplishments. It would be typified by incessant squabbling, stagnation, and helplessness when it came to pressing issues like how to close a budget deficit that exceeds 5% of GDP. It would also be difficult to determine France's place in the European Union with regard to issues like Ukraine's policy, China's policy, and the green transition. Macron's current term expires in 2027, and he is not permitted to call new elections for another year.
Markets sometimes favor certainty, which may be brought about by a far-right majority administration. If opponents stage a demonstration in the streets against the idea of a far-right government in charge of the second-biggest economy in Europe, it might, however, set off a different form of political unrest. And because Bardella's platform is full of unfulfilled promises and tax breaks, it might scare investors a lot when it makes its first big decisions, which are likely to happen in the fall.
Less than two months ago, Macron welcomed the pledge of 15 billion euros in fresh investments from companies like AstraZeneca, Microsoft, and Amazon at his annual powwow of leading global CEOs. He urged them to select France. Today, if they were asked, they might decide to pass.