France's Finance Minister issues warning over potential financial crisis.
There's increasing apprehension in the financial world about the possibility of a right-wing government taking over in France after the upcoming elections. Bruno Le Maire, France's Finance Minister, hasn't ruled out the chance of a new Euro crisis brewing.
Recently, during an interview on Radio France, Brun Le Maire confirmed that France's financial stability could be at risk during the elections. When asked if the unstable political situation in France, one of the largest economies in the Eurozone, could lead to a financial crisis, Le Maire answered with a "Yes." He mentioned that France currently pays more than Portugal to service its debts. The risk premium on French government bonds had also reached its highest level in over four years.
The financial markets have caught onto the election agendas of different parties, and their reactions are somewhat apprehensive. France's eurosceptic and right-wing Rassemblement National (RN) of Marine Le Pen is currently leading in the polls. They're advocating for a younger retirement age and protectionist economic policies as part of their "France first" agenda. S&P Global, a rating agency, has assessed that the proposed policies of the RN could potentially impact France's credit rating, leading to a downgrade.
The newly formed French Left alliance has also come forward, pledging to decrease the retirement age and introduce a new wealth tax for the wealthy. Both sides would be taking steps to reverse Macron's pension reform, which was opposed by many protesters. After raising the retirement age from 62 to 64 years, it now stands at 64.
According to the polls, the RN is likely to win the elections on June 30 and July 7. However, it's anticipated that they won't manage to claim an absolute majority. After his coalition lost in the European elections, Macron called for an early parliamentary election. Macron himself has denied any intentions of stepping down as President. In a recent poll, the RN received approximately 31% of the votes, the united left received 28%, and the government coalition received 18%.
The looming specter of an RN win in the elections is causing panic among stock market investors in Paris. The French benchmark index CAC 40 saw losses of up to 1.5% in the morning, with shares of major French banks like Societe Generale, BNP Paribas, and Credit Agricole, losing up to 3.6%. The European industry index also suffered a 1.3% drop. Concerns of a potential state debt crisis if the RN comes into power are plaguing the Borseaners.
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Emmanuel Macron, the current President of France, has expressed his intentions to call for an early parliamentary election following his coalition's loss in the European elections. Due to the potential victory of the eurosceptic and right-wing Rassemblement National (RN) led by Marine Le Pen in the upcoming French elections, there are growing concerns about France's role in addressing the European debt crisis, given that Macron's pension reform proposals are opposed by many and could be reversed if the RN wins.
