Macron Heads Into Election Showdown as Le Pen Looks Hard to Beat

(Bloomberg) -- Emmanuel Macron’s rallying call to the French people to “write history” will become a reality on Sunday when voters head to polling stations for the first round of legislative elections.

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But it may not be the history the French president had hoped for.

In the three weeks since he called the snap vote in what he described as an “act of confidence,” the far-right National Rally party of his nemesis, Marine Le Pen, has built a commanding lead in polls. Macron’s centrist group is trailing in third place behind a hastily cobbled-together coalition of leftist parties that includes Socialists, Communists, Greens and the far-left France Unbowed.

Macron’s surprise move on June 9 followed a drubbing in European elections in favor of the far right. It caught his allies off guard and unleashed turmoil in markets over the potential consequences of a National Rally or leftist government on public finances and businesses in the euro area’s second-biggest economy. Citizens across the country worked through the impact of the vote on their pocketbooks and on issues such as immigration and security.

In a short televised address announcing the snap vote, Macron said “the rise of nationalists, of demagogues, is a danger for our nation, but also for our Europe, for France’s place in Europe and the world.”

Since then, he has been accused of killing his centrist political alliance by his former prime minister and potential successor, Edouard Philippe, and of crushing democracy by the center-right Republican head of the Senate, Gerard Larcher.

Le Pen has attacked the president’s handling of the economy, going to the heart of his attempt to build a legacy as a reformer. She has also taken aim at how his government has tackled issues that are core for her supporters such as immigration and security. The leftist New Popular Front coalition, meanwhile, has portrayed itself as the only political force able to keep the National Rally away from power. On the economic front, it has called for a sharp increase in France’s minimum wage and higher taxes for the wealthy.

Macron has countered by warning of the dangers of the “extremes,” saying the agendas of the far-right and far-left blocs pit people against each other and could lead to “civil war.”

Absolute Majority

The president’s difficulties began when his party lost its absolute majority in the National Assembly in the legislative ballot that followed his reelection for a second five-year term in 2022.

His government has struggled to build consensus in parliament to pass key reforms. Its popularity plunged last year when it pushed through an unpopular increase in the retirement age by using a constitutional tool to bypass a vote, despite months of protests. It has, however, survived no-confidence motions with the help of the Republicans, though that party has now split apart after its leader, Eric Ciotti, allied himself with Le Pen.

Macron says dissolving parliament and calling a vote was the only way to avoid greater disarray in the fall, when he said opposition parties were planning on forcing out his government during the vote on the annual budget.

While some of the 577 seats in the lower house will be decided Sunday, most will likely go to a runoff on July 7. The two-round ballot makes seat predictions tricky, yet projections by polling companies show the National Rally and its allies are on track to become the biggest formation. Le Pen’s group would need 289 lawmakers to have an absolute majority. Two surveys published Friday, by Elabe and Odoxa, estimated it would get 260-295 and 265-305 seats respectively.

A separate LegiTrack OpinionWay-Vae Solis poll of voting intentions among 1,058 people showed several dozen National Rally candidates will be elected outright in the first round, with about 400 present in the second, where the number of three-way runoffs is expected to reach 150-200, a record.

Such uncertainty was reflected at the end of the week as traders ditched French assets. The yield on 10-year government notes rose to the highest since November, widening the spread over safer German securities to 86 basis points — the most since 2012. The benchmark CAC 40 stock index fell for a fourth day, heading toward its lowest level since January.

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