Presidential election in France: can Marine Le Pen replace Macron?

Enlarge image

Incumbent Macron

(right)

(left)

War and inflation have changed the election campaign.

The race will be closer than expected.

Photo: IMAGO/Thierry Breton;

IMAGO/Le Pictorium

Is

(53) experiencing her deja vu at the weekend?

When the right-wing extremist French presidential candidate ran against

(44) five years ago, it was still a neck-and-neck race in the first ballot.

In the decisive run-off, however, the leader of the then Front National received just half the votes that the victorious social-liberal candidate Macron received.

According to the latest polls, it could be much narrower this time: Macron's lead over Le Pen is melting, the incumbent president is only a few percentage points ahead of the lawyer.

The markets react nervously.

It is expected that in Sunday's first ballot none of the 12 candidates will receive an outright majority.

In the

it is very likely that there will be one

direct duel between Macron and Le Pen

come.

A survey by Harris Interactive puts the incumbent president in a runoff election just 3 percentage points ahead of the right-wing populist.

Macron remains the favourite, but he is "much more vulnerable" than in the 2017 election, says analyst Gareth Gettinby from asset manager Aegon: "The surprise of the Brexit vote is still remembered, so that a victory for Le Pen cannot be ruled out. This would greatly increase uncertainty for French growth, inflation and public finances."

Le Pen wants to score points with this program

Le Pen has changed her messages in this election campaign and is softening up in order to also score points with the French middle class.

She also wants to absorb the recent price shock caused by increased energy costs by reducing VAT on energy from 20 to 5.5 percent and by significantly increasing basic salaries.

This could bring her additional votes among the population, who are unsettled by the high inflation.

Le Pen has also learned the lessons of the 2017 electoral defeat and is no longer calling for France to leave the EU: "

But Le Pen continues to make no secret of her aversion to "the" technocrats in Brussels and to "the" financial markets.

As President, she will " not leave

" Le Pen said this week.

"The policy that I want to implement is not intended for the stock markets. It's not the markets that create jobs, it's not the international financial world."

If she wins the election, she will take "tough" action against the financial markets.

Le Pen left open exactly what that should look like.

The right-wing populist was married to a businessman in her first marriage, but critics say she doesn't know much about business.

Pierre Blanchet from the French asset management company Amundi lists the

and the Rassemblement National as follows:

· An as yet unspecified wealth tax with a focus on financial assets

· Reduction of VAT on energy from 20 to 5.5 percent

· 10 percent increase in base salaries through lower corporate taxes

· Retirement age at 60 for long-term employees

· Expansion stop for wind power, focus on the already dominant nuclear power as well as hydropower and hydrogen

· Unspecified preference for small and medium-sized French companies over foreign companies

· Creation of a French sovereign wealth fund

European cohesion is likely to suffer under Le Pen as President.

"With its program of protectionism, backward steps in reforms, subsidies and tough immigration measures, it would trigger many conflicts with the EU," says Berenberg economist Kallum Pickering.

Le Pen's statements like: "France won't win if it's not France."

Words like "renationalize" or phrases like "competitiveness through preference for French products" were used in their speeches.

Le Pen's expensive promises

Le Pen's projects are likely to be expensive.

According to estimates by the think tank Montaigne, the plan alone to significantly reduce energy taxes and the retirement age will cost almost twice what Le Pen had rumored.

France's already high budget deficit is likely to climb by a further 102 billion euros, meaning that the debt-to-GDP ratio should be 7.1 percent in 2027, the think tank calculates.

Macron's Finance Minister Bruno Le Maire warned this week that inflation would continue to rise under Le Pen abolished for those under 30 years of age.

That, too, is part of Le Pen's rather vague ideas about economic policy.

So Macron wants to secure a second term

The Macron camp is concerned about inflation and the latest polls.

Macron is remembered by his compatriots primarily as a mediator and crisis manager in the Ukraine war.

Shortly before the first ballot, Macron also focused on the issue of purchasing power and promised on Wednesday to increase pensions in France.

In order to keep the pension system affordable, Macron wants to raise the retirement age to 65 - and according to surveys, around 70 percent of the French are against him with this demand.

According to Amundi analyst Pierre Blanchet, Macron wants to secure a second term as president with the following key points in his "France 2030" plan:

· Pro-European programme

· Tax cuts and elimination of corporate taxes that are not based on profits

· Change in inheritance tax: Direct and indirect transfers of wealth are favoured

· 30 billion euros investments to accelerate the energy transition and support the industry

· Reform of unemployment benefits

· Financial aid and support for innovation in agriculture

· Raising the retirement age from 62 to 65 years

In terms of economic policy, Macron's program is a continuation of the past five years, says Blanchet: a clear pro-Europe course, gradual reform of the employment office and the pension system, additional tax cuts of around 15 billion euros.

In addition, Macron wants to continue to invest heavily in nuclear energy, wind energy and the French army.

The war in Ukraine has changed the election campaign in France: Macron's course against the Russian aggressor Vladimir Putin is also supported by most of the other candidates, so the crisis tends to strengthen the incumbent president.

At the same time, however, the enormous price increases of the past few weeks are triggering fears in the population, which Macron's main competitor Le Pen could take advantage of - even if her promises of lower taxes hardly seem financially viable.

Purchasing power of families, inflation and restructuring of industry

Macron has responded to this in the past few days and promised to maintain or strengthen the purchasing power of low- and middle-income households.

When it comes to energy policy, Le Pen can hardly pose a threat to him, as both advocate further expansion of nuclear power.

The biggest risk for Macron at the moment is his unpopular pension reform, which he was unable to implement during his first term in office.

Le Pen is likely to focus even more on this issue in the runoff election in two weeks.

The number of start-ups and young companies has increased significantly in recent years.

Macron has many company leaders and founders behind him, but not the ordinary workers: According to a survey by the "Economist", almost 40 percent of the workers want to support Le Pen in the first round of voting, while Macron only has 20 percent.

The difference: Le Pen wants to avoid factory closures at all costs.

Macron, on the other hand, is just shouting to protesting workers whose jobs are threatened by industrial change that he wants to try.