The scenarios below outline the prospects of the two candidates' ability to implement their electoral programs in the event of victory, based on different degrees of parliamentary support following the legislative elections in June. Failure by the next president's party to secure a parliamentary majority would increase the risk of 'co-habitation' with a prime minister from a different party, significantly reducing his/her prospects of implementing his/her electoral objectives.

Key findings

• Polling on voting intentions in the second round of the presidential election indicates that, for the first time, a victory for Marine Le Pen is possible.
• A high abstention rate among supporters of far-left candidate Jean-Luc Mélenchon would be likely to favour Le Pen and would be a decisive factor in victory for her in the second round.
• A victory for Le Pen would be likely to lead to a significant shift in France's foreign policy direction, towards a more Eurosceptic and NATO-critical stance.
• A Le Pen victory would lead to a downward revision of S&P Global Market Intelligence's GDP growth forecasts, as well as an increase in French bond spreads and a depreciation of the euro.
• We expect that economic policy direction would remain unchanged under a second term for incumbent Emmanuel Macron, with lower taxes and more flexibility in the economy remaining priority objectives.
• After the election, protest risks are likely to remain high regardless of which candidate secures victory.
• Among the main policy objectives of the candidates, those entailing pension, tax, and labor reforms are likely to be some of the most contested, particularly Macron's proposed increase in the retirement age.
• The outcome of the June parliamentary election will be a key indicator of the next president's ability to implement his/her preferred policy agenda; a Le Pen presidency would be more likely to be frustrated by an uncooperative legislature.

Scenario 1: Macron victory with single-party majority 

La République En Marche (LREM)'s ability to implement its economic program will be highly dependent on the composition of the 577-seat National Assembly. A stable majority for LREM in the National Assembly would enable Macron to implement most of his economic platform and other policy priorities, such as labor market reforms including the streamlining of unemployment benefits, without major hindrance from parliament. Macron would maintain a clear pro-EU stance and focus on further increasing France's influence on the bloc's decision-making, particularly by strengthening defense co-operation, taking a leading role as the bloc's major military power.

However, it is also likely that some of Macron's more contentious planned reforms, such as the increase in the pension age, would be scaled down as a means of mitigating the risk of trade union strikes and protests, which led to the paralysis of public transport for several weeks in late 2019 in opposition to Macron's first attempt at overhauling the pension regime.

This scenario would not trigger a revision of our economic forecasts for France as our baseline assumes a continuation of the current policies. However, we still expect a Macron government to be ready to use fiscal policy to support the economy if deemed necessary, even if this implies missing the deficit-reduction targets agreed with the EU.

Scenario 2: Macron victory with two-party majority

Former president Nicolas Sarkozy's endorsement of Macron ahead of the second round, along with Pécresse's backing, increases the likelihood of an LREM- LR (Les Républicains) coalition, should LREM fall short of a significant number of seats to secure a majority. Such a coalition would be likely to maintain a firm pro-EU position, advance labour market streamlining, and implement the energy transition strategy aimed at achieving France's carbon-neutrality goal by 2050, investing in the expansion of nuclear energy production. However, LR MPs would be less likely to support the construction of new wind farms. LR MPs would be likely to back an increase in the retirement age as part of the pension reform, which was also one of the elements proposed by LR presidential candidate Pécresse.

Scenario 3: Macron victory with multi-party coalition

Agreement on certain tax cuts (e.g., on production taxes) would be likely under a multi-party coalition. However, consensus on contested policies such as the pension reform or changes to the labor market regulation would probably remain difficult to reach, raising the likelihood that crucial elements of Macron's electoral program, particularly the pension overhaul, would be passed by decree, as was the case in 2020.

Scenario 4: Le Pen victory with single-party majority

A victory for Rassemblement National (RN) would alter France's dynamics with other major EU member states such as Germany, with which Le Pen intends to end defense co-operation. Although Le Pen has moved away from her pledge to take France out of the EU, many of RN's proposals, such as restricting social benefits for French citizens and unilaterally reducing France's contribution to the EU budget, entail a Eurosceptic stance and are not in line with EU law. Should these policies be pursued, France's relationship with the EU would be likely to deteriorate, making consensus-building in the bloc, for example on the renegotiation of the EU's fiscal rules, significantly more difficult.

A victory for Le Pen in the second round of the presidential election would also have wide-ranging implications for France's economy. RN's protectionist policies would be likely to lead to a deterioration of France's investment environment, resulting in weaker growth compared with our baseline projections. The proposed increases in social spending and tax cuts on energy would be likely to drive a widening of the fiscal deficit in 2022, which would most likely persist throughout Le Pen's mandate. However, it is likely that some of the tax and spending proposals included in RN's manifesto would be watered down to limit some of the negative market reaction following the election result. An RN victory would be likely to have a negative impact on French equity and bond prices.

Scenario 5: Le Pen victory with two-party majority 

If the support of Zemmour's R! and Nicolas Dupont-Aignan's Debout la France (DLF) fails to bring RN enough parliamentary seats, a robust performance by LR in the legislative election would increase the likelihood of RN attempting to form a coalition with this party. However, policy divergence over long-awaited reforms such as that of the pension system and the labor market would probably slow down their implementation and require changes to initial electoral proposals. Failure to agree on a compromise within the coalition would be likely to lead to the defection of more moderate MPs from LR, who would most likely join LREM's parliamentary group, or to LR deciding to pull out of the coalition, depriving RN of the majority required to continue to govern. Overall, it would be difficult for RN to secure a stable coalition, given the party's protectionist market policies.

Scenario 6: Le Pen victory with multi-party coalition

Under this scenario, RN would find it difficult to implement large parts of its economic platform and there would be an elevated risk of policy stalemate. Le Pen's RN would most likely attempt to form a coalition with Zemmour's R! and Dupont-Aignan's DLF, both of whom backed Le Pen after their elimination in the first round. These coalition partners would probably support Le Pen's referendum on constitutional changes regarding restrictions to immigration, as well as Le Pen's Eurosceptic stance. Should their combined votes be insufficient to form a majority in parliament, RN would probably approach LR for a coalition agreement, although such an arrangement remains unlikely. LR's presence in the coalition would be likely to mitigate Eurosceptic policies. However, its support would probably be conditional on the government's compliance with EU law.

If Le Pen were to fail to form a coalition following the legislative elections, this would increase the probability of cohabitation with a prime minister from a different party, such as LR; a stalemate would raise the likelihood of Le Pen dissolving the National Assembly and calling a fresh election.

Posted 20 April 2022 by Bibianna Norek, Research Analyst, Europe & CIS, Country Risk, S&P Global Market Intelligence and

Diego Iscaro, Head of Europe and CIS Economics, Insights and Analysis, S&P Global Market Intelligence

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.