Macron's stronger result wasn't enough to undercut the advance of extremist parties

The results of the first round of elections point to an increasingly fractious governing environment

Although FrontierView puts the odds of Emmanuel Macron’s re-election at 65%, Marine Le Pen’s strong performance means MNCs need to prepare for the possibility of a far-right, populist presidency. Although a Macron victory would offer more economic stability, the results of the first round of voting highlight how difficult it will be to pass many of his initiatives. More than half of voters supported far-left or far-right candidates, with this pattern likely to be repeated in June’s legislative elections. These parties will push back strongly against Macron’s energy, defense, and labor market policies. Moreover, public discontent could lead to more demonstrations or strikes during his second term. As such, MNCs should plan for a more uncertain policy environment that could delay or water down additional support measures for consumers, the green transition, and pension reforms.


French voters went to the polls for the first round of presidential elections on April 11, with the results confirming what most analysts predicted—a run-off between current President Macron and far-right candidate Le Pen. Specifically, Macron garnered 27.8% of votes, while Le Pen came second with 23.2%. This was Marine Le Pen’s best showing, underscoring the significant threat she poses to Macron’s prospects for re-election.

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The results from the first poll contained some notable surprises that could presage the outcome of the second round of voting on April 24. First, despite concerns about Macron’s flagging popularity, he managed to increase his share of the vote by 3.8 percentage points compared to 2017, versus Le Pen’s 1.9 percentage point gain. Second, voter turnout was higher than predicted. At 26%, the voter abstention rate was 3 percentage points higher than in 2017 but lower than the 30% some pollsters expected. This matters because a higher abstention rate would benefit Le Pen in the runoff.

However, the most noteworthy outcome was the strong performance of left-wing candidate Jean-Luc Mélenchon, who received 22% of the vote. Capturing the support of Mélenchon voters will therefore be essential if Macron is to secure a second term. While Mélenchon has urged his supporters not to vote for Le Pen, his party is still discussing whether to officially endorse Macron.

Even if Mélenchon does throw his weight behind Macron, left-wing voters could prove difficult to win over. This segment opposes NATO membership, nuclear energy, and reforms to France’s pension system. Consequently, as much as a third of Mélenchon voters could opt to stay home on April 24, harming Macron’s chances of re-election.

With the probability of a Le Pen victory now estimated at 35%, it is important to consider how her presidency could upend policymaking at both the national and EU levels. In terms of the former, Le Pen has pledged to exempt those under age 30 from income tax and would offer tax cuts to firms that raise minimum wages by 10%, putting upward pressure on France’s budget deficit. While her policies on immigration and the hijab wouldn’t have a direct impact on the country’s economy, they could lead to greater social unrest, undermining investment and economic activity.

On the European level, MNCs can expect a Le Pen presidency to lead to heightened instability. Her election would likely result in a slight weakening of the euro against the dollar and raise the prospect of future volatility in currency markets. Although Le Pen has abandoned her pledge to drop the euro, she has maintained other anti-EU policies, such as the re-establishment of the primacy of French law and cutting France’s contribution to the EU budget.

Overall, MNCs should expect a more confrontational relationship between France and the EU. This would delay and possibly hamper the adoption of future fiscal measures at a time when Europe is facing significant economic risks, spooking businesses and resulting in lower levels of investment.

Unanimity on foreign and security policy would be especially difficult to achieve, with Le Pen having come out against Russian energy sanctions. While energy sanctions would impose greater costs on consumers and businesses, the EU’s inability to pass such measures would signal a breakdown of EU unity. This, in turn, would increase the probability of a prolonged conflict in Ukraine and elevated inflation in Europe.

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