Political upset in France
Even though the left-wing New Popular Front (NFP) unexpectedly won the second round of the French legislative elections with 182 seats and gained a relative majority, financial markets are likely to remain on edge. This is because the NFP - an uneasy alliance of green, socialist, France Unbowed and the communist party - needs a coalition partner to obtain more than the 289 out of 577 seats required in the French assembly to govern.
The NFP will probably have to form a coalition with president’s Macron’s centrist Together party. It did far better than expected and gained 163 seats, slightly more than the far-right National Rally (NR) with 143 seats, the biggest loser in the second round of the French presidential elections.
Uncertainty about what comes next
Despite the highest turnout for decades of around 60%, there are no real winners in the French elections as the country enters a new era of parliamentary democracy and is split into three factions. France will likely see a big change in the way it is governed with the centre of gravity shifting from the president to parliament.
Diametrically opposing views among political parties - which aren’t known for their conciliatory stance - will make forming a coalition that can govern France difficult.
Despite Jordan Bardella’s far-right NR party suffering a major election defeat, he and his compatriots won 50 more seats than in the 2022 French National Assembly and are already focusing on the 2026 mayoral elections and the 2027 presidential election.
More political uncertainty lies ahead for Europe’s third largest economy.
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