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Macron snap election call rocks French stock

By Julian Shea in London | China Daily Global | Updated: 2024-06-18 01:54

French President Emmanuel Macron waits for the arrival of a guest at the Elysee Palace in Paris, France on June 17. [Photo/Agencies]

French President Emmanuel Macron's decision to call a snap election for the country's national assembly following the recent European Parliament elections continues to have an economic impact, with stocks in the country falling in value and pushing the British stock market into its place as the largest in Europe.

Data from Bloomberg showed that in the aftermath of the election being called for the end of June and beginning of July, the combined value of stocks in France has slipped to $3.13 trillion, below the $3.18 trillion value of markets in London, with all the gains made this year on the Cac 40 stock index in Paris wiped out in its worst week since 2002.

The Daily Telegraph reported that shares in banks including BNP Paribas and Credit Agricole, both of which are major holders of French bonds, which have seen a rush of sell-offs, fell by more than 10 per cent.

Alberto Tocchio, portfolio manager at Kairos Partners, told the Telegraph: "We are in a period where there are no certainties for three to four weeks and the market could unfortunately become more unstable."

In April 2022, Macron was elected to a second term as president, but his far right challenger Marine Le Pen performed strongly, and in the parliamentary election shortly afterwards, Macron's Ensemble coalition lost its overall majority, putting him in a weakened position.

At this year's European elections, the far right National Rally party won 31.5 percent of the vote in France, prompting Macron to call the snap election.

Sebastien Maillard, associate fellow at the Chatham House international affairs think tank, said it was a calculated gamble.

"The National Rally turned the (European) elections into a referendum on Macron," he explained. "Now Macron is turning the snap election into a referendum on the far right."

Gilles Ivaldi, a professor at the Paris Institute of Political Studies, said Macron was effectively calling the bluff of electors over a traditional way of expressing disapproval of the government, by voting for a radical alternative.

"Now Macron is telling voters, 'We're playing for real,'" Ivaldi told broadcaster Al Jazeera. "It's not about expressing your discontent. It's about whether you truly want the far right to be in charge.

"He is hoping the fear of the far right will produce some important changes… no-one saw this coming, and no-one knows what will come out of the election."

Former socialist prime minister Lionel Jospin, whose own political career was ended in 2002 when Marine Le Pen's father Jean-Marie Le Pen kept him out of the presidential elections run-off, said he feared the path Macron was taking.

He made a rare intervention into contemporary politics to tell newspaper Le Monde that Macron had forced the country into a "hurried" campaign and was "giving the (National Rally) a chance to come to power in France", which he said was "not responsible," adding that "surprise is not enough to be master of the game".

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