France can’t afford a Le Pen government

It is possible that President Macon had some clever plan when he called a general election in the wake of catastrophic European election results last night. After all, he has a reputation for always being several moves ahead on the political chessboard. And yet one point is surely clear. France can’t afford a Le Pen government – and its election may well trigger a crisis in the French debt markets.

Le Pen, after all, is a high welfare, big state, economic nationalist

It is, perhaps, not quite such a foregone result as Britain’s election a few days earlier. And yet after the second round of voting on 7 July, it looks almost certain that Marine Le Pen’s National Rally will emerge as the largest party in the French parliament, and will be able to form a government. The markets, to put it mildly, did not like the look of that. On Monday morning, there was a sharp selloff in equities, with the French stock market index the CAC-40 falling by almost 2 per cent, and government bonds spiking sharply higher, especially compared to their German counterparts.