French Election Update : IT’S OVER !
Head of Macro Analysis
Summary: The campaign is just starting. But the election is a done deal. President Emmanuel Macron will be easily re-elected whoever his opponent might be (at the moment either the far right leader Marine Le Pen or the center right conservative Valérie Pécresse). The main question mark is whether Macron will be able to win a comfortable majority at the June 2022 legislative election. This is far from certain.
French Election Preview published : A few months ago, we published our preview for the 2022 April presidential election. The first round will happen on 10 April and the second round on 24 April. It gives a broad overview of the current state of French politics and the main economic reforms which are currently put forward by the lead candidates. See here for the full report.
Macron wins it all : All recent polls show Macron is still miles ahead of the pack in the first round (~26-27%). Other candidates are far behind. The far right leader Marine Le Pen and the winner of the center right primary Valérie Pécresse are neck-to-neck, ~16-17%. The Zemmour boom is over for good, in our view. The former TV pundit is at 12-13%. This is high. But this is not enough to hope to make it to the second round. The Left is polling at historically low levels. Considering the mediocrity of most left candidates, this is not surprising. This is well deserved. The former third man of the 2017 presidential election, Jean Luc Mélenchon, is ~9-10%. The Socialist candidate, Paris mayor Anne Hidalgo, is at best ~3-4%. This is the beginning of the end for the Left, or at least for the Socialist Party who used to be one of the two most important political parties in France after WWII. According to an IPSOS poll released on 7 January, only 12% of people who say they will vote for Hidalgo in the first round believe she can make it to the second round. This is historically low. Expect the Socialist Party to disappear and lose most of its deputies (currently 29 out of a total of 577 deputies) at the legislative election of June 2022. In the second round, all polls released since the past summer show Macron winning comfortably whoever his opponent might be. This is still early days. But we believe the election is already over. Unless there is an unexpected turn of events, Macron will be re-elected for a second term (2022-2027). It is, however, unclear whether he will be able to win a comfortable majority in Parliament, as it was the case in 2017 (314 deputies). Several deputies from the ruling party have already informed they will not run again. This is a bigger question mark than the presidential election for France’s politics in 2022, in our view.
Will Zemmour be able to run ? In the French political system, presidential candidates need to secure a minimum of 500 sponsorships from national or local elected officials from at least 30 different departments or overseas collectivities, with no more than a tenth of these signatories from any single department. Several candidates reportedly have the required sponsorships (Hidalgo, Pécresse, the Green candidate Yannick Jadot). Mélenchon and Le Pen will likely get them before the deadline of 4 March. But this is less certain for Zemmour. He officially acknowledged he is facing difficulties. He claimed that he was prevented by « the elites » from gathering them. This might be partially true. But, at the end of the day, we believe that he should be able to run.
What to watch now: Besides the polls, we are focused on the « Popular Primary » - a left primary organized by a group of civil society activists. The online vote is to take place from 27 to 30 January. Already 100,000 citizens have registered (for comparison, there were around 122,000 registered voters to the Green primary of September 2022). The aim is to pick only one official left candidate for the presidential election. It will never happen. All the lead candidates refuse to participate (Mélenchon and Jadot especially), with the exception of the former Hollande minister, Christiane Taubira. Hidalgo was initially against this initiative, then supported it and now is against it again because Jadot is not taking part of this. This is a big mess. In our view, the Left is weak not because Macron is strong and has a solid electoral base. The Left is weak because the candidates are mediocre. Some candidates embrace wokism and culture war instead of defending the middle-class workers and focusing on social issues. Others have unrealistic economic proposals (multiplying by two at least the salary of teachers, for instance). All of them share a common characteristic : they have an ego problem.
Latest Market Insights
Outrageous Predictions 2023: The War Economy
- The constantly growing global need for energy drives the world's richest to huddle up and launch a R&D project in a size the world hasn't seen since the Manhattan Project gave the US the first atomic bomb.
French President Macron resignsThe political stalemate in France and the rise of Marie Le Pen following the 2022 elections corners President Macron, forcing him to give up on politics and resign from his position. At least for now.
Gold rockets to USD 3,000 as central banks fail on inflation mandateAs markets and central banks realise that the idea that inflation is transitory is wrong, and that prices will remain higher for longer, gold is sent through the roof, hitting a price tag of USD 3,000
EU Army forces EU down path to full unionWith continued challenges in the region and a US military that isn't aggressively enacting its former role as global policeman, the European Union agrees to create its own armed forces, bringing the whole region closer.
A country agrees to ban all meat production by 2030In an effort to become one of the global leaders on the path to net-zero emissions, one country decides to not only put a heavy tax on meat, but to ban domestic production entirely.
UK holds UnBrexit referendumFollowing a recession and domestic pressure, the United Kingdom is thrown into political turmoil that will end with a vote to wind back Brexit.
Widespread price controls are introduced to cap official inflationHistory tells us that with the war economy comes rationing and price controls. And this time is no different, as policymakers introduce strict price controls that lead to a range of unintended consequences.
OPEC+ & Chindia walk out of the IMF, agree to trade with new reserve assetSanctions against Russia have caused widespread turmoil due to US Dollar moves in countries across the globe that don't consider the US an ally. To relieve themselves from this, they leave the IMF and create a new reserve asset.
USDJPY fixed to the USD at 200 as Japan overhauls financial systemFollowing the challenges that faced the Japanese Yen in 2022, the Bank of Japan attempts to keep the currency from sliding. Unsuccessful on the long-term, Japan will launch a reset of its entire financial system.
Tax haven ban kills private equityWith the war economy comes an increased focus on national interests and sovereign nations' ability to assert themselves. In that regard, the OECD countries turn their attention on tax havens and pull the big guns out, banning them altogether.
Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)