Victory by the incumbent centrist Emmanuel Macron remains the most likely scenario for the second round of the French presidential election on 24 April. Nevertheless, the polls are tight, and Marine Le Pen of the National Rally (RN) has a much better chance of winning the presidency than in 2017 – especially if many disillusioned voters stay at home. A Le Pen victory on 24 April would be a political shock to Europe at least as big as Brexit and would bring significant challenges for businesses.

A softened approach

Since her loss in 2017, Le Pen has largely been biding her time, seeking to avoid controversy and abandoning the parts of her platform most likely to scare off voters, such as leaving the EU or the euro. Similarly, she has avoided stances that could make her look like a conspiracy theorist, such as vaccine scepticism. Le Pen has also gone to great lengths to moderate extreme social conservatism within the RN, for example softening her position on abortion and gay marriage.

But still a populist

Like many populists in Western Europe in recent years, Le Pen’s electoral platform largely focuses on traditionally right-wing concerns like immigration and crime, as well as moving into more traditionally left-wing positions on supporting workers. Le Pen has tapped into public sentiment that Macron’s efforts in bringing down unemployment has been insufficient, especially in the face of rising living costs. Le Pen’s programme would see her lowering taxes on fuel and energy, exempting people aged 30 and under from income tax, and lowering taxes on families. Meanwhile, she also plans to index pensions against inflation and would refuse to increase the retirement age.

To counteract the significant budget deficit this would create, Le Pen argues that her government would make savings by significantly restricting immigration and immigrants’ rights, which she sees as a net drain on the system through use of social housing and access to benefits. However, this is highly unrealistic, and Le Pen would be faced with difficult choices. Le Pen would likely need support from the centre-right to pass tax decreases, who will refuse to contribute to a significantly deeper deficit. She would be reluctant to apply higher taxes on businesses generally, especially on small and medium-sized businesses. However, a tax on large multinationals specifically could be on the cards.

Head-to-head with Brussels

Meanwhile, many of Le Pen’s proposed policies would see France refuse to comply with EU rules and clashes with Brussels would be common. Favouring French citizens for social benefits over other EU citizens and French companies for public procurement go against the principles of the EU’s single market. Plans to implement border checks would also face opposition from the EU and moves to bring them in would significantly disrupt the region’s supply chains.

Le Pen would be likely to expend political capital to avoid EU regulations in areas where France stands to gain the most. This includes on agriculture, public procurement and utilities. However, she would be less likely to object to regulations going against the interests of US-based companies. This includes the agreement on global taxation of multinationals, which she supports, as well as the EU’s agenda on digital sovereignty. 

Le Pen insists that she would not seek to withdraw from the EU but would seek to reduce France’s financial contributions to the bloc and attempt reform from within. This would likely result in deadlock and a deepening of tensions. This would potentially paralyse decision-making within the EU and lead to significant changes to the internal dynamics of the bloc given that France is more deeply emmeshed in the EU than the UK was as it went through Brexit, as a founding member of the EU and part of the single euro currency. 

Foreign policy shift

Le Pen in recent weeks has sought to distance herself from her previous praise of Russian President Vladimir Putin. However, her election would undoubtedly see France take a less robust stance towards the Kremlin than Macron. Le Pen has indicated that she would be unlikely to fully align herself with the EU’s stance towards Russia, including on sanctions. In particular, Le Pen would fervently oppose sanctions that would be likely to increase the cost of living in France, such as measures on Russian oil and gas. 

Le Pen would also have France play a less prominent role in NATO, withdrawing the country from the alliance’s military command. Macron may remain sceptical about NATO’s effectiveness, but a Le Pen presidency would in an instant reverse the increasing unity that the alliance has shown in recent months.

Business risks

Le Pen’s positions on both domestic social issues and international affairs would undoubtedly change the way in which many in the West view France. France’s bilateral relations with close allies like Germany would come under significant strain. However, for French companies and those operating in France, the reputational fallout would likely be limited, especially in industries with few links to the political system. The most significant changes to the operating environment would be likely to come in connection to regulatory uncertainty, both domestically and in terms of compliance with EU laws. 

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