Support for Euroskeptic Le Pen Grows in France
The prospect of a French exit from the European Union (EU)
has gained momentum after polls showed that far-right presidential candidate Marine Le Pen’s lead over her two main challengers widened in recent weeks.
According to a poll conducted by communications firm Elabe for French television station BFMTV and magazine L’Express, Le Pen, who wants to take France out of the EU, is now polling at 27 percent in the first round vote. Her two main rivals, Emmanuel Macron and François Fillon, have 20 percent and 17 percent of the popular vote, respectively. (See also: Should Investors Worry about Marine Le Pen?)
Why Has Support for Le Pen Surged?
Up until recently, center-left candidate Macron was expected to be the clear winner of the first round of voting, which is due to be held in late April. However, the country’s former economy minister’s popular pro-business and pro-EU policies have since become overshadowed by comments he made during a recent trip to Algeria. His claim that France’s colonial past represented “a crime against humanity” was poorly received by voters.
Macron’s statement on this divisive issue has made him even less popular than Fillon, who was the front runner to win the election until a scandal broke over salaries paid to his wife and two children for government jobs which apparently did not exist. Fillon, who pledges to save the French economy by cutting costs in the public sector, vowed to fight on, even though the allegations appear to have tarnished his reputation. (See also: François Fillon Refuses to Quit Presidential Race.)
Can She Win the Election?
The controversies surrounding Le Pen’s peers have also helped her to make up ground in the decisive second round of voting. While Macron is still the overall favorite to win the election — polls currently predict Le Pen to lose out to Macron in the second round by 59 percent to 41 percent — investors are becoming increasingly aware that the gap is narrowing.
This edginess among investors is mirrored in France’s bond yield, which continues to climb as support for Le Pen grows. The euro has also weakened in recent days, driven in part by fears that a Le Pen victory represents the biggest threat to the EU’s established order in 60 years — France is one of the EU’s founding member states.
Uncertainty over who will win the French election this May will likely cause further volatility across asset classes in coming months. During this period, investors may flock to safer assets such as gold, the Japanese yen and U.S. government debt. (See also: Safe Haven.)