The New Popular Front (NFP), a quickly formed coalition of left-wing parties, won the most seats but fell short of a parliamentary majority. This outcome will necessitate extensive negotiations to determine the new prime minister and to achieve any significant progress in governing the country.

This creates various complex scenarios to consider. For financial markets, it also means that the likelihood of a major political shift—and the accompanying major spending decisions—is delayed. This might explain the subdued market reaction.

Philippe Ledent, a senior economist at ING, an investment bank, commented that the result “plunges France further into the unknown.”

Ledent outlines two potential scenarios:

Minority Government

French political parties are not accustomed to making concessions to form coalitions. The NFP’s leading figure, Jean-Luc Mélenchon, demanded the full implementation of their programme. “If political parties maintain such positions, a long period of instability will ensue,” said Ledent.

“Without an absolute majority, and given the radical nature of its socioeconomic programme, the left-wing bloc won’t be able to pass a single law unless it uses Article 49.3 to force legislation, which it previously criticized. A motion of censure would likely be tabled quickly, bringing down the government.” This situation would also apply if Macron tried to install a prime minister from his own bloc or from the right.

Instability would continue until at least June 2025, as the president cannot call for new elections before then.

Learning to Cooperate

“Excluding the 80 MPs from the far left and the 145 from the far right, there are over 350 MPs available to form a broad coalition to reform France, considering diverse opinions. In other European countries, including Germany, this configuration would be natural and would result in a government with a clear majority.

“Certainly, some doors are beginning to open for such a coalition. Of course, the President’s camp is in favour.”

“French political parties are stuck in a strategic game where the only solution is for the parties to work together. This cooperation would help restore calm and political stability. However, because any concession would be seen as a betrayal of their electorate, no party seems willing to enter discussions in the short term.”