The second largest European economy did not turn to the (extreme) right and many capitals breathed a sigh of relief. “I and the entire German Government are relieved”, acknowledged the German Chancellor. Before him, the Polish Prime Minister had already referred to the “enthusiasm in Paris” on social media.
Also in Brussels, sources from different institutions report the same relief, although officially, neither the European Council nor the Commission wish to comment. Ursula von der Leyen’s executive takes refuge in the usual argument that she does not comment on electoral results, so as not to be accused of interfering in internal politics.
However, the relief is mainly in the sense of “the worst-case scenario was avoided”. The same sources report fears about the consequences of the “political impasse”. The prospect of a paralyzed French parliament is “not reassuring”. No party or alliance forms a majority, forcing negotiations to find a government coalition with different political forces and quadrants.
This political gymnastics is common in many Member States – and even in the European Parliament – and is not unique to France. Diplomatic source points to problems “in and coming from Paris”. Among the concerns are economic ones, with markets already reacting. At a time when the country has entered into an excessive deficit procedure, there is fear that “reforms will become impossible and some will be reversed”.
The first reform suspended was unemployment benefits. The decree should have been published on July 1st, but the Prime Minister, Gabriel Attal, announced the suspension on the night of the first round, given the disastrous result of the alliance of parties that support the French President, Emmanuel Macron. , and in a gesture that was read as an attempt to facilitate the transfer of votes from the left to the second round of the legislative elections.
Reversing this reform was, in fact, one of the flags of the New Popular Front (NFP), the left-wing coalition that ended up winning the legislative elections in France and that will have to come to terms with Macron’s liberal center to govern.
The NFP program also includes the promise to revoke the pension reform that Emanuel Macron forced last year, placing the legal retirement age at 64. Bringing it back down to 62 years old is the objective of the alliance that includes various left-wing forces, including communists, socialists and greens up to the radical left of Unsubmissive France. Among the campaign promises is also the increase in the minimum wage to 1600 euros (+14%).
The concern in Brussels is also about the French public debt, a rise that could also have an effect on the euro. The spring economic forecasts, published by the Commission before Macron called the elections, pointed to a deficit of around 5% this year and next, growth of just 0.7% in 2024 and 1, 3% in 2025 and a debt above 112% of product and rising. A scenario that did not yet take into account the current political instability.
Faced with this panorama, European partners remain optimistic. “We now hope that the President, but also the elected representatives, will be able to form a Government in a constructive way”, says Olaf Scholz. The expectation is that there may be a stable government, supported by the National Assembly. The other question that remains to be answered is whether the new political program that emerges from the future coalition is compatible with European commitments.
