France: Another ‘national’ European election campaign - ING

Julien Manceaux, senior economist at ING, points out that the France's economy is recovering and so are voting intentions in favour of President Macron.

Key Quotes

“French PMI indicators were confirmed to be just below the 50.0 threshold in March, indicating a slight decline in activity. However, most indicators showed improvements in the economic outlook in the first quarter, enough in any case to believe that a rebound in domestic demand is likely in the first half of 2019.”

“In particular, hiring and investing intentions in the service sector in March were back at last October's levels, just before the “yellow vest” crisis brought virtually all confidence indicators down.”

“At the height of that crisis in early December, Mr Macron's poll ratings fell to a low of 15% (Ifop survey published on 3 December), with the extreme left seemingly benefiting with around 12% of voting intentions. Since then, the president’s party, LREM, is back at 22%, and the extreme left at 8% (Ifop survey published on 28 March).”

“Marine Le Pen’s Rassemblement National (RN) is close, with 21% of voting intentions. If the UK does not take part in the EU elections, we expect both parties to gain 20 seats in the new European Parliament, which will be restricted to 705 seats after Brexit.”

“The prime minister, Edouard Philiippe is due to communicate the government’s intentions early next week but President Macron has yet to decide what to announce. For now, no door is closed, but he said proposals could be discussed until the summer.”

“We suspect Mrs Loiseau’s list success will depend much more on these than on LREM’s own proposal for Europe. The road still looks long towards the 26th of May and the first proposals, together with a possible resurgence of violence in some French cities, may well frame the outcome of the next election.”