The euro's political weak spot
French politics is a major direct menace for the euro, even if that dénouement might still be three years away and it might appear a low possibility. But, if the threat materialises, it will be lethal for the euro.
Michael Collins, Investment Commentator at Fidelity
The threat stems from the collapse in support for the two mainstream parties, the centre-rightUnion for a Popular Movement (UMP) and President Francois Hollande’s Socialist Party, and the simultaneous rise of Marine Le Pen’s populist, right-wing and euro-hating National Front. So upbeat is Le Pen, now almost the de facto opposition leader, she hopes to win the presidency in 2017.
Le Pen’s danger to Europe is that she is talented enough to direct all French angst, no matter its source, against one enemy [the EU] and to get away with posing just one solution – the replacement of the euro with the franc – she has pledge to do this on the first day in office!
Her political deception is to blame all France’s woes on the euro (admittedly, Europe’s biggest post-war mistake). How Europe would cope if France were to ditch the euro is anybody’s guess.
Investors and others will need to form their own judgments if polls show Le Pen is heading towards the presidency – in July she took the lead in the first-round polls for this election; in September she beat Hollande in a second-round matchup, according to one polls.
Frequently Asked Questions about this Article…
French politics poses a threat to the euro due to the collapse in support for mainstream parties and the rise of Marine Le Pen's National Front, which is critical of the EU and the euro.
Marine Le Pen is the leader of the National Front, a populist right-wing party in France. She is significant because she opposes the euro and has pledged to replace it with the franc if elected president.
If Marine Le Pen becomes president and follows through on her pledge to replace the euro with the franc, it could destabilize the euro and create uncertainty in European markets.
While it is uncertain, Marine Le Pen has shown strong polling numbers, leading in first-round polls and beating President Hollande in a second-round matchup according to some polls.
If France leaves the euro, it could lead to significant economic and political instability in Europe, as France is a major player in the EU.
Investors should closely monitor the political developments in France, especially the polls, to assess the potential impact on the euro and European markets.
Marine Le Pen criticizes the euro as being responsible for many of France's economic woes, calling it Europe's biggest post-war mistake.
Everyday investors should be aware that changes in French politics, particularly a shift towards Marine Le Pen's policies, could have significant implications for the euro and European investments.
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