France Elections 2024 Shock Puts Macron In Tight Spot

France Elections 2024- French voters have surprised everyone by not giving the far-right Rassemblement National party a victory in a national election runoff on Sunday.
Instead, the left-wing New Popular Front (NFP) is now the biggest group in the domestic parliament. This has put President Emmanuel Macron in a difficult position, even though he has managed to navigate through the country’s chaotic political situation. The parliament will be hung for at least a year, which means it will be challenging for Macron.
While investors in French assets might be relieved that the fear of a RN-dominated parliament has diminished, the uncertainty is not over. Now, Macron has to decide whether to appoint a prime minister from the NFP coalition of the extreme left, the greens, and the socialists.
The election resulted in a minority government without enough seats for a parliamentary majority. Macron may face intensified divisions within the coalition. Jean-Luc Mélenchon, leader of the far-left, immediately demanded the implementation of key parts of the NFP’s platform, including price controls on energy, a 14% minimum wage increase, and other changes.
Bond investors might be concerned about France’s economic stability. Macron plans to take time to assess the strength of parliamentary groups, aiming to build a centrist coalition.
However, it’s uncertain whether mainstream conservatives and some left MPs will support this alliance. Chaos may persist, especially when the new government needs to address the country’s fiscal deficit and high debt, which might lead to higher taxes, reduced spending, and potentially an austerity plan.

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