President Macron's Re-election: Lower Short-Term Uncertainty but Fiscal Challenges Remain
This commentary discusses the outcome of the second round of the French presidential elections that took place on the 24th of April 2022. While the re-election of President Macron reduces the inherent short-term uncertainty that would have been associated with a Le Pen presidency, and reinforces the likelihood of broad policy continuity, fiscal challenges remain elevated for the President and the future government. Maintaining a majority in the Parliament following the legislative elections scheduled for the month of June will remain key for President Macron to deliver on his policy and reform agenda.Key highlights include:
• President Macron has been re-elected with 58.5% of the votes against Le Pen 41.5%.
• The margin between both candidates is somewhat wider than expected, although it has decreased in the last five years.
• DBRS Morningstar will now focus its attention on the parliamentary elections in June.
• DBRS Morningstar continues to expect broad policy continuity and commitment to fiscal rebalancing from the future government.
“Given the additional budgetary spending announced during the presidential campaign, including the extension of support measures to mitigate the effects of inflation, the possible early indexation of pensions and an increase in teachers and other civil servants' salaries, we consider that rebalancing fiscal accounts will remain quite challenging for the French government”, said Nicolas Fintzel, Senior Vice President at DBRS Morningstar.
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