French Presidential Race: Another Exceptional Vote?

25 April 2017

Europe is braced for another important vote with the prevailing French presidential elections, after the first of two voting rounds on Sunday 23rd April led to an unprecedented rebuffing of the country's political establishment.

As expected, none of the initial 11 candidates won an outright majority, which means that there will be a run-off ballotage on 7th May between the top two: centrist and pro-EU candidate Emmanual Macron (Independent), who led the field with 23.8%, and far-right populist and anti-EU candidate Marine Le Pen (National Front), who gained 21.4% of the vote.

Neither of the main political parties in France made it to the run-off. With 19.9% and 19.6% respectively, the mainstream conservative candidate François Fillon (Républicain) and the far-left firebrand Jean-Luc Mélenchon followed closely behind Macron and Le Pen, while the other mainstream candidate, Benoit Hamon (Socialist) and his left-wing policies, only achieved 6.3%.

Two non-mainstream party candidates take the lead: unprecedented, but not unexpected

These results are unusual, but not unexpected considering a turbulent political backdrop . The world, after all, is still reeling from a storm of unexpected voting outcomes around the globe last year. As if to pay homage to this unpredictability, what would normally be a race between the mainstream left and centre-right parties was scuppered by current president Francois Hollande's unpopular term as leader of the Socialists and by the scandals surrounding Francois Fillon of Les Republicains, respectively.

The voting demise of the mainstream parties can also be attributed to the current economic state of France, and the electorate feeling fed up with politics. As Gerard Lyons , formerly Boris Johnson's chief economic advisor, states, "The economic performance of France has not been particularly good in recent years. The left and the centre-right have failed dramatically - so France wants change . Hence, the second round sees Emmanuel Macron versus Marine Le Pen."

So who, out of the top two candidates, is expected to win the final round? Opinion polls indicate Macron.

CEO & Chief Economist of Macronomics  Graeme Leach  comments, "Francois Fillon (the Margaret Thatcher candidate) and Jean-Luc Melenchon (the Jeremy Corbyn candidate) have already endorsed Emmanuel Macron (the Tony Blair candidate), and thrown their weight behind him, urging their supporters to do so also. So Macron has a huge advantage in being able to hoover up the other main party candidates. The recent Dutch elections also provide a lesson that whilst voters might be in a rebellious mood, that doesn’t mean extreme right or left candidates are guaranteed the levers of power. The French revolution will have its limits.

Moreover, the recent Dutch elections provide a lesson that whilst voters might be in a rebellious mood that doesn’t mean extreme right or left candidates are guaranteed the levers of power. The French revolution will have its limits."

Where will the other voters turn?

So, while Le Pen was expected to reach the second round as happened, it is predicted that she will still lose, ultimately, to Macron on 7th May. However, although the first round revealed a lower % of the vote for Le Pen than predicted by the polls, support for Mélenchon and the fringe candidates in the first voting round have made it clear that populism is not dead.  And what about Fillon's supporters? Is there a chance that his voters will now turn to Le Pen in their pursuit for dramatic change?

Probably not, as Graeme explains: "Francois Fillon was also a radical candidate, albeit a one who was also a former Prime Minister. Fillon advocated abolishing the 35-hour week, drastically simplifying labour laws, slashing public spending (which stands at 57% of GDP) and public sector employment. However, despite the fact that many Fillon supporters want big economic change, this does not mean they will vote for Marine Le Pen (the Nigel Farage candidate). Macron is promising cuts in corporation tax, more flexibility in the 35-hour week and a reduction in the unemployment rate to 7%. Policies aimed directly at Fillon supporters.

In many ways, Le Pen is the exact opposite of Fillon and Macron supporters. On economics, she wants more intervention by Government e.g. tariffs - upsetting Fillon supporters. On the EU, she wants to renegotiate membership and hold a referendum on Frexit, as well as French membership of the euro – upsetting both Macron and Fillon supporters. French voters are fearful of economic malaise, but not so much - at least as yet - they’ll risk membership of the euro and the EU. This should guarantee a Macron victory in the second round.

The caveat is that an awful lot of French voters remained somewhat undecided in the run-up to the first round vote (around one-quarter) and, therefore, might be persuadable to shift their vote in the second round, if one candidate stumbles, or there is a major shock such as a terrorist incident. Absent such a stumble or shock, Tony Blair is likely to beat Nigel Farage in 2 weeks."

What challenges lie ahead for the future French president?

Whether Macron or Le Pen, one thing is for certain: the individual set to replace Francois Hollande is facing a five-year term fraught with major challenges:


"Unemployment remains stubbornly high at 10.5% in April", says Graeme. “French citizens have been promised in election after election that this or that candidate would tackle economic malaise and reduce double-digit rates of unemployment. But it hasn’t happened, with a string of broken promises. The current President, Francois Hollande, promised so much and delivered so little.

The French economic model is struggling. From 1950 to 2016, French GDP growth averaged around 3% per annum. But if you take the most recent decade, from after the financial crisis, GDP growth has averaged just 1%. The WEF Global Competitiveness Report ranks France 141 out of 144 countries on ‘hiring and firing’. The French labour market is sclerotic, and, as the old saying goes, 'if you can’t fire, you won’t hire'."

The euro crisis

Is France's participation in the single currency endangered under the next French president? "The euro is a fundamentally flawed economic concep t  and results in weak growth, high unemployment and feeds extremism," comments Gerard. "But France will not be able to change the euro – whatever Macron says – and so, if he wins, he will have to tinker at the edges, with lower corporation tax. The economic issue is that France needs to spend, lend and change."

Support for leaving the euro does seem to exist, as Graeme reports, "5 years ago, I spoke at an event in the British Embassy in Paris (an identical building to the Elysee Palace, next door but one). Attending the event were 70 French CEOs and in the Q&As one CEO said that the French economy would have to leave the euro in the future. I was surprised that a French business leader thought this, even though my own economic views supported his argument. Somewhat nonchalantly I asked if anybody else agreed, and almost very hand in the room went up. I was stunned."


Following various incidences of terrorism around Europe, including France, in recent years, security  will no doubt be a key concern for the next president of France.

According to Gerard: "France’s continuing state of emergency shows that it faces a serious domestic security issue. What will also be of note is the approach it takes to geopolitics, as along with the UK, France has the major military force in western Europe. Security – alongside trade  – will be an important part of the UK’s Brexit negotiations and is a challenge for all."

Trade, imigration and... Frexit?

Graeme comments: “Macron is pro-EU and pro-free trade agreements (although this negotiating power resides with the EU, not the French Government). In sharp contrast, Le Pen is anti-globalisation, wants to leave the EU and slash immigration, etc.

My own view is that the EU will begin to disintegrate in the early 2020s (after a return of the euro crisis), and will face an existential crisis. A Le Pen victory would likely bring this timetable forward. However, a potential existential crisis could contain a surprise. Out of the ashes of disintegration could rise the Phoenix of a United States of Europe.

Just as everyone thinks the EU will disintegrate, a core group of countries (possibly Germany and the Benelux) could push forward with much deeper integration towards a quasi-United States of Europe. Whether or not France would be part of this group could well turn on whether Macron or Le Pen was President at the time."

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