The first round of the French election has concluded and the results are in. After a very tight race, the two candidates who will face off in the second round on May 7th, 2017 are Emmanuel Macron and Marine Le Pen. With these two competing in the final round, France is facing two possible futures, each with a different effect on the market.
On the one hand, a win by Macron could bring stability to the EU and calm some of the anxiety that has been felt in the Union since last June’s Brexit vote. On the other, if Le Pen wins, we could be seeing the beginning of the collapse of the EU and might have to start practising the phrase “Frexit.” So what will each candidate bring to the table? Here’s a breakdown of the scenarios to be expected for each one’s win.
Macron is without a doubt the EU’s preferred candidate. From an economic standpoint, Macron is a self-proclaimed “Convicted European” who wishes to tighten the relationship between France and the EU. Internally, the 39-year-old former Economy Minister wants to reduce corporate taxes, renegotiate the 35-hour workweek and cut unemployment. Macron’s stance on immigration is quite liberal and he has said he believes in free movement within the EU for its citizens. Polls show that he is the favourite for the second round and a win by him would no doubt rejuvenate the EU and ease some of the tensions felt in the Union recently.
Marine Le Pen
The far-right nationalist candidate is probably the EU’s worst nightmare. Running on a platform of national pride, anti-immigration and Euro-skepticism, a win by Le Pen will send shockwaves throughout Europe and the world. Her economic guidelines are quite strict, and could take a toll on the French economy if she keeps her promise of a hard-set 35-hour workweek and a retirement age of 60. Her tough stance on immigration, calling for all illegal immigrants to be deported and significantly limiting legal migration, could be a burden on France’s economy when imposed. However, the silver lining could be the strengthening of French-US relations, as some of Le Pen’s ideals are shared by President Donald Trump.
Regardless of who wins, the French people will wake up to a different reality on May 8th. Whether it’s Macron or Le Pen who takes it all – the results will have a great impact on the country and on the EU as a whole. Since one winner will signal stability in Europe, while the other a revolution of sorts in the EU, there will be many opportunities for traders to seize either way.