Markets pricing in chances of Le Pen victory, euro area spreads widening and talk about the future of the euro
The prospect of a victory for Marine Le Pen has unsettled markets. A case can certainly be made for how she could win. We believe that, for all her impact in moving French politics to the right, this is unwarranted. Despite his lack of backing by an established political party, his age (39) and his thin governmental experience, the centrist candidate, former banker Emmanuel Macron, has a much better chance than Le Pen of entering the Élysée Palace in May. The left has divided; and as Macron acquires ever more high-profile endorsements. At a recent press conference confirming his intention not to run, the centre-right primary candidate and former PM Alain Juppé seemed to be opening the door to eventually giving Macron his blessing. (Europe Watch 10 March 2017)
Macron beats Le Pen by 66% to 34% in the second round to become President. His En Marche! party subsequently wins a huge majority in the French parliament.