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PARIS: Political parties and business leaders alike tried to figure out what a possible far-right win could mean for France following President Emmanuel Macron’s decision to call a snap election after a bruising loss in a European Parliament ballot. Macron’s shock decision offers the far right a shot at real political power. Amounting to a roll of the dice on his political future, it immediately sent the euro down and hit French stocks and government bonds. A source close to Macron said the 46-year-old leader, whose power has been diminished since he lost his absolute majority in parliament two years ago, calculated that there was a chance he could win back a majority by taking everyone by surprise. But if Marine Le Pen’s National Rally (RN) does take over, the source said, the gamble is that the next three years would demonstrate their incompetence to voters and undermine their bid for the presidency in 2027. But that is not without risk, that source said. “I knew this option was on the table, but when it becomes reality it’s something else,” they said. “I didn’t sleep last night.” Read also: Macron calls shock French elections after far-right rout Voting will take place in two rounds on June 30 and July 7 for 577 lawmakers. The next government will take over in July. For Le Pen, the challenge is transform her rising popularity into a win at home too. The vote is likely to revolve around discontent with Macron’s style of power, cost of living and immigration policies, but also about whether the RN can be trusted to run a major European government. “Everything points to the RN winning a relative or absolute majority,” Emmanuel Pellerin, a lawmaker from Macron’s Renaissance party, told Reuters. “But that forces the French to think about what is at stake.” Even if the eurosceptic, anti-immigration RN did score a majority, Macron would remain president for three more years and still be in charge of defence and foreign policy. But he would lose the power to set the domestic agenda, ranging from economic policy to security and immigration to finances, which would in turn impact other policies, such as aid to Ukraine, as he would need parliament’s backing to finance any support as part of France’s budget. Leaked poll The early election will also come shortly before the July 26 start of the Paris Olympics, when all eyes will be on France. “This will be the most consequential parliamentary election for France and for the French in the history of the Fifth Republic,” Finance Minister Bruno Le Maire told RTL radio, referring to Charles de Gaulle’s 1958 constitution, considered the starting point of modern French politics. Among policies put forward by the party, the RN has proposed higher public spending, despite already significant levels of French debt, threatening to further raise funding costs at banks. It also wants to expel more migrants, stop family reunification, restrict childcare benefits to

🌍 Judgments in Paris: Navigating the Impact of France's Snap Parliamentary Elections on Markets 📈🇫🇷 In an already eventful year of global elections, President Emmanuel Macron’s unexpected call for a snap parliamentary election in France stands as a pivotal moment for financial markets. Investors are keenly observing the contest to control the National Assembly, given the potential implications for France’s fiscal policies and market stability. 🇫🇷 Key Scenarios and Market Reactions:    ✅ Shaky Gridlock: The most probable outcome, with Marine Le Pen’s far-right National Rally securing the most seats but falling short of a majority. This scenario could maintain the current high-risk premium on French bonds. 📊    ✅ Awkward Partnership: The far-right gains enough seats to form a government, leading to a “cohabitation” with Macron. The approach taken by the National Rally’s leadership will be crucial in determining bond market reactions. 🤝    ✅ Left Outperforms: The New Popular Front, the leftist alliance, wins unexpectedly. This is viewed as the worst-case scenario for bond investors, likely increasing market volatility. 📉    ✅ Macron Prevails: Although currently unlikely, if Macron’s party and allies retain the largest parliamentary group, this could be the most favorable outcome for French bonds. 📈 🇫🇷 Current Polls and Investor Concerns Marine Le Pen's National Rally leads with 34.2% in Bloomberg’s poll of polls, ahead of the left’s 28.2%, with Macron and his allies trailing. France’s electoral system, with its two-round voting process, adds unpredictability, often resulting in tactical voting to block specific outcomes. 🇫🇷 Market Implications With France’s debt exceeding 110% of GDP and significant deficits under EU scrutiny, any electoral outcome is unlikely to be straightforward. As Theophile Legrand of Natixis highlights, the risk of political gridlock and ensuing market volatility is substantial. 🏦📉 #Finance #France #Elections #MarketAnalysis #EmmanuelMacron #MarineLePen #FrenchBonds #Investing #PoliticalRisk #EconomicPolicy #MarketVolatility #EU #DebtCrisis

In our recommended article of the week: Financial Times - Europe must ask: what if Biden wins in November? https://lnkd.in/eEGqT8eg The U.S. elections are increasingly concerning Europe. Will there be a "Trump 2"? Stay tuned to geopolitical developments with us. #usa #geopolitics #trump

The US 2024 election is likely to be a rematch between incumbent Joe Biden and former president Donald Trump. Read our latest article to learn more about the key policy differences under either administration. https://lnkd.in/e2GkydeH

The shock replacement of the Democratic presidential candidate less than four months before the U.S. election has introduced a new element of uncertainty about the outlook for economic policy in 2025 and beyond. Here’s a Bloomberg News analysis with experts of what Kamala Harris could mean for tax and economic policy. #politics #economy #election2024

Canadian Political Commentary, U.S. Political Commentary and Canada-U.S. Foreign Relations - Why Canadians should pay attention to the United States presidential election #usa #election2024 #canadausa #usacanada #foreignrelations #canadaunitedstatesforeignrelations #unitedstatescanadaforeignrelations

*And It’s a Wrap* Election bells rang loud in the US, the UK, and France- but less loud in Iran this week. In the United States, the Democrat candidate issue can perhaps best be described by the Katy Perry song. It’s hot and it’s cold. It’s yes and it’s no. Where support for VP Kamala Harris to replace Biden shot up after the debate, for most Democrat Governors, it’s a ‘yes’ for candidate Joe Biden. So for now, this does not seem to be Kamala Harris’s moment to shine. But perhaps the biggest electoral moment came for the United Kingdom when Keir Starmer’s Labour party won the General Election by a landslide. While the premiership rests with Labour, the growing influence of Reform UK, the anti-immigration, right-wing party suggests an ideological alignment with continental Europe. In the latest ‘right’ turn in Continental Europe, the far right gained ground in the French parliament, but is expected to fall short of an absolute majority. President Macron’s Ensemble coalition is expected to lose seats by at least a half. With no clear coalition yet, France could see a week of absence of a central government amidst a fractured Parliament. In Iran, the first round of voting for the new President saw the lowest turnout in elections since the 1979 revolution. The race is between reformist Masoud Pezeshkian, whose promise is a return to negotiation with the West, and hardliner Saeed Jalili, campaigning for economic growth in Iran. Jalili is known for his opposition to the nuclear deal negotiations in the 2000s, a period which was followed by the isolationism and consequent economic distress in Iran. Polls predict a ‘most likely’ victory for Pezeshkian after the second round of votes on Friday. What do these elections mean for the world? For International Relations, the expectation is a ‘you win some, you lose some’ situation. The victory of Reformist Pezeshkian could win the world avenues for negotiation between Iran and ‘the West’, with possible implications on the Israel-Gaza conflict as well. But loss of free global trade is almost written in the West. Regardless of who wins the race in the US, policy towards global trade will be geared towards protectionism. Whether the tariffs imposed will be blanket or targeted towards specific countries like China will depend upon the incumbent President. As seen in the Trump era, an EU-US Trade War is not unheard of, and blanket tariffs across all imports are very much on Trump’s re-election cards. A similar policy of protectionism has already taken hold in the EU, as it recently raised tariffs against Chinese EVs. The beginning of a potentially new world will unfold through the next few months. #riskanalysis #yearofelections #geopolitics #macro Confluence Consultants Shraddha Bhandari Amandeep Kaur Ahuja Apoorva Gupta Image Source: Financial Times

US Election Lookahead – Harris Administration Scenario Three months ahead of the election, Kamala Harris is virtually tied with Donald Trump in key swing states, including in ‘must-win’ Pennsylvania. She has momentum coming out of the Democratic National Convention but has limited campaign experience, and economic challenges remain. As part of Gatehouse’s 2024 Election Series, our team have produced a scenario-based dashboard focused on a potential Harris Administration's domestic and foreign policy priorities. Key Takeaways 1. Harris’s domestic policy agenda would probably not differ dramatically from Biden’s in most areas. Her top priorities would be to boost US economic productivity and employment, tackle cost of living and welfare challenges, and accelerate onshoring in key sectors. She would look to achieve many of her key objectives via targeted tax incentives. 2. On foreign policy, Harris would also be unlikely to deviate considerably from Biden’s ‘New Washington Consensus’. Major new trade deals are unlikely, but expect a greater focus on strategic sourcing, particularly regarding critical minerals in Africa. 3. The early stages of a Harris Administration would probably be highly constrained by firefighting, especially if Republicans hold the Senate and Trumpist legislators are enraged by an electoral defeat they see as illegitimate. State of Play Harris would probably pursue continuity with President Biden’s domestic and foreign policy agenda in most areas, at least initially. She may have little choice but to do so if she finds herself presiding over a divided Congress, a fractured nation, and an aggrieved set of Trump supporters and legislators. Such a domestic backdrop would probably constrain Harris’s ability to address seemingly intractable foreign policy challenges, and she may be forced to make tricky decisions earlier than desired. This makes her senior foreign policy appointments all the more important: Kurt Campbell, Bill Burns and Phil Gordon would be a formidable line-up. Either way, Harris’s election would change the global geopolitical atmosphere next year, compared to 2024’s nervous mood music. Her relatively ‘business as usual’ approach would be particularly welcomed by European leaders wary of a Trump return. NATO’s future would look more secure, the ‘green agenda’ would remain intact, and global trade would be spared the blanket disruption threatened by Trump. Meanwhile, Russia and China may feel more uneasy. President Putin may be forced to recalculate in Ukraine, while President Xi would not welcome Harris’s emphasis on strengthening the US’s Indo-Pacific alliances. To learn more about our findings and discuss what these policy implications might mean for your organisation, please contact info@gatehouseadvisorypartners.com. #Gatehouse #Geopolitics #USElection #2024Elections

Good business perspective on the upcoming presidential election from Bill Conerly! Love this little tidbit: “Fairly little credence should be given to any candidate’s promises.” Tap to read the full article:

Emmanuel Macron may be betting on the National Rally winning the French legislative elections then failing in office. But the record of populists in power suggests this gamble could backfire. As Donato Di Carlo and Federica Genovese explain, it is far from certain that populist governments will produce economic instability. The Italian economy under Giorgia Meloni is performing relatively well compared to France, Germany and the UK. Economic and social policies in Eurozone states are starkly constrained by the European Semester, which aligns their budgetary and economic policies with objectives agreed at the EU level. And like Italy, France relies on a professionalised bureaucracy, with civil servants who can act as a brake in favour of responsible economic policymaking. As if this were not enough, extremist parties in power are likely to come under greater financial stress due to the higher borrowing costs bond vigilantes demand while pushing back against extremist agendas. All of this gives populist governments an incentive to "behave" on economic matters. https://lnkd.in/eNtu5TZj