Le Pen Triggers Rise of Far-Left Candidate, ‘Potential Tsunami on the Horizon’

The first round of the presidential elections in France is approaching, set to take place on Sunday, April 23, with the world awaiting the results with a certain unease or, as Reuters put it: If Donald Trump’s election in the U.S. and Britain’s decision to leave the EU have stirred global economic waters, a potential tsunami is on the horizon.

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The latest twist in France’s tumultuous presidential campaign, the rising popularity of far-left candidate Jean-Luc Mélenchon, is interpreted as potentially having the greatest impact on the global economy. If Mélenchon makes it to the second round alongside the far-right Marine Le Pen, EU member states could experience a collective migraine given that both candidates oppose the euro and the European Union. Frexit, the French version of the Brexit event shaking European public opinion, is being increasingly mentioned.

Choice Between Two Evils

With a strong performance in television debates last week, Mélenchon has secured public support, with the latest polls indicating that 17 percent of voters would cast their ballots for him. – For France, Europe, and their markets, choosing between Mélenchon or Marine Le Pen on May 7 would be a choice between two evils – states a statement from Berenberg Bank.

However, the likelihood of this happening is low as polls show that the favorite for the election is former Economy Minister Emmanuel Macron.

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The state of the French economy is not the best. The unemployment rate has been at 10 percent for five years, and the projected economic growth of only 1.4 percent places France at a low 25th position out of 28 EU member states. According to a World Economics study on the relative value of the euro in the eurozone, France is far less competitive than Germany in this regard. However, despite having weak economic growth, France stands much better than the U.S. and the UK in terms of income equality. Recent studies have shown that the median income in France in 2002 was 17% higher than in 1996, while in the U.S. it increased by only two percent during that period.

Nevertheless, the National Association of Purchasing Managers (PMI) index indicates a rise in business optimism in the country, and the PMI report for April, released on Friday, shows growth in all three segments – manufacturing, services, and construction.