French Election Results Leave Investors Worried about Economy and Trade with Germany

After the first round of the election, Marine Le Pen, the presidential candidate of Front National, addressed her followers. German companies are closely monitoring the situation as France heads to the polls in snap parliamentary elections that could impact the country’s political center. In investors fear that victories by either the RN or the leftist New Popular Front (NPF) alliance could pose a threat to the French economy, which is the second-largest in the European Union. This decision has caused concern in financial markets and raised worries about France’s fiscal challenges.

Patrick Brandmaier, managing director of Franco-German Chamber of Industry and Commerce expressed concerns about the potential negative impact on France’s attractiveness due to economic policy announcements from both right and left. The possibility of increased government spending in Paris has also spooked companies, adding to existing concerns about the sustainability of France’s fiscal path. The outcome of this election and future policies will cause uncertainty among French and German companies.

Investors worry that an increase in taxes by far-left or far-right could reverse business-friendly reforms under Macron or affect their operations negatively. The potential reversal of these reforms would be a source of worry for German businesses who rely heavily on French trade and investment opportunities.

The outcome of this election will determine whether there will be a shift towards a more nationalistic or populist approach to governance, which could have significant implications for international relations and trade agreements with Germany being one such key ally.