Macron's Snap Election Announcement Sparks Euro and CAC 40 Decline

Key Takeaway

• President Macron's snap legislative election announcement introduces political uncertainty, causing the euro to fall 0.5% and France's CAC 40 index to drop 2.2%.
• Jordan Bardella, the 28-year-old National Rally president, gains influence with strong youth support and social media presence but maintains hardline stances on immigration.
• Bardella's economic policies include tariffs on vulnerable sectors and boosting low wages by 10%, though their feasibility is questioned.

Snap Election Announcement

President Emmanuel Macron's decision to call a snap legislative election has introduced a new layer of uncertainty into France's political landscape. This move follows a significant defeat for Macron's party in the European Parliamentary elections, where Marine Le Pen's National Rally (RN) emerged victorious. The election, set to take place over two rounds beginning June 30, is the first of its kind this century, cutting short the National Assembly's term.

Yves Bertoncini, an independent consultant in EU affairs, described Macron's decision as "audacious," noting that such a move is typically made when few options remain. Macron's position as head of state remains unaffected, but his ability to push through legislation and maintain a like-minded prime minister is at stake. The euro fell as much as 0.5% to $1.0748, its weakest in a month, and France's CAC 40 stock index dropped 2.2% in early trading on Monday.

Bardella's Rising Influence

Jordan Bardella, the 28-year-old president of the National Rally, is poised to become a significant figure if his party secures a legislative majority. Bardella has been instrumental in making the party appear more mainstream, distancing it from its controversial founder, Jean-Marie Le Pen. Despite this, Marta Lorimer, a political science researcher at the London School of Economics, cautions that Bardella's ideas align closely with Marine Le Pen's, describing him as "a cleaner, nicer face, but he's not a moderate."

Bardella's popularity, particularly among the youth, is bolstered by his strong social media presence, including 1.4 million followers on TikTok. He has also taken media training classes to improve his public image. However, Bardella's political stance remains firm on issues like immigration, where he portrays African immigration as a threat to French culture, echoing the "great replacement" theory.

Economic and Social Policies

Bardella's economic agenda includes imposing more tariffs on sectors vulnerable to foreign competition, such as electric cars and agricultural goods. He has criticized the European Union's free trade agreements and green deal agenda. During a debate with Macron's Prime Minister Gabriel Attal, Bardella struggled to articulate his policies, particularly on creating a "double border" for migrants.

Bardella's economic plans also involve creating a sovereign fund for energy and defense, increasing pensions, lowering energy prices and taxes, and boosting low wages by 10% while reducing corporate contributions. However, his economic agenda has been described as "a little bit all over the place" by Lorimer, who questions its feasibility once in power.

Street Views

• Marta Lorimer, London School of Economics (Bearish on the National Rally's moderation):

  "Bardella has the exact same ideas as Le Pen, it’s just that he’s not called Le Pen and he’s 28. The National Rally hasn’t moderated hugely in the last 10 years. There’s nothing that would justify thinking of it as anything else than a radical right party. And Bardella is just a cleaner, nicer face, but he’s not a moderate."

• Antonio Barroso, Teneo (Neutral on Macron's strategy against RN):

  "Ultimately, Macron’s goal might be to bring an RN victory forward in time to expose the party’s lack of experience in government and make them confront politically painful decisions ahead of the 2027 presidential election."