Marine Le Pen’s legal battle is set to define France’s 2027 presidential election, which will take place on the 18th April next year. Despite her conviction in the parliamentary assistants case, the Rassemblement National leader has appealed the ruling and confirmed her intention to run for the Élysée.
Yet Le Pen’s candidacy is only part of a broader political realignment. With Emmanuel Macron unable to seek a third consecutive term and the traditional governing parties continuing to weaken, a run-off between Le Pen and the radical left’s Jean-Luc Mélenchon is becoming an increasingly plausible scenario. Such an outcome would not only reshape French politics but could also have significant consequences for France’s economy and on the country’s position in the wider European Union. If Macron has been fundamental in the increasing unity in the EU today, this might change with a new president next year.
Why this election could rewrite the Fifth Republic
If the past two presidential elections in France have seemed somewhat innovational, the Presidential election next year could break a whole series of precedents for the French Fifth Republic.
The first of these is the collapse of the establishment political parties, which have now been almost entirely excluded from the Presidential elections for the past 10 years. The last president to belong to one of the two establishment parties, the Socialist Party and Les Républicains, was François Hollande when he beat Nicolas Sarkozy in the 2012 presidential election. Since then, these parties have lost considerable influence.
Meanwhile Emanuel Macron’s Renaissance party, founded before the 2017 presidential election, looks to be increasingly linked exclusively to the person of Macron, and thus, after this election, will likely lose influence and fade away.
However, the biggest revolution of these elections is in two other parties, Rassemblement National and La France Insoumise. While these are by no means new to the French political scene, the two parties have grown gradually and opinion polls place them in pole-position to be the two parties that will arrive in the second round of the presidential election in 2027.
Two radically different economic programmes
The two candidates in pole-position for the Elysee Palace, coming from opposing positions of the political spectrum, have radically different visions for France and for the future of the French state and economy.
For Marine Le Pen, leader of Rassemblement National, fundamental reforms should be introduced on VAT on energy, on the protection of the industrial sector, on the restriction of immigration and on increased strategic state intervention. Additionally, Le Pen and her party have historically been opposed to some EU fiscal rules and are sceptical on free trade agreements that could undermine French industry.
For Jean-Luc Mélonchon, themes such as wealth taxation, minimum wage and retirement age are fundamental reforms to be considered. A Mélonchon presidency could also see ideas such as an expansion of the public sector, the introduction of price controls, a strengthening of workers’ rights and greater ecological planning. Like Le Pen, Mélonchon is also critical of EU fiscal rules, and sceptical of new trade deals that could undercut French workers and French industry.
Although the ideological directions differ dramatically, and on certain themes such as immigration the two candidates could not be more in disagreement, both programmes involve a larger role for the state and challenge elements of the economic consensus that has shaped France over the past two decades.
How markets are likely to react
While we cannot be certain how markets may react, the instability that France may be about to live through is not unknown to the country. In 2024, President Macron called a legislative election and lost the majority that his governing coalition had in the National Assembly.
In 2024, with the instability surrounding the result of the legislative election], French bond spreads widened, French banks fell and the CAC 40 underperformed. Credit rating agencies widely warned about political uncertainty in France and the effects of this on economic stability and growth due to a difficult legislative landscape.
This time the markets, in order to assure stability, will be attentive of any changes in policy regarding fiscal sustainability, the State-debt trajectory, possible pension reforms and the budget deficit. This especially, given that France already has a public debt above 110% of the country’s GDP, persistent budget deficits as well as pressure from the European Commission.
Any government proposing expensive reforms, especially in sectors that could be highly significant, would face immediate market scrutiny.
The European dimension
France’s next president will influence far more than the country’s domestic economy. As the eurozone’s second-largest economy, any major shift in fiscal or industrial policy will be closely watched across Europe. Both Marine Le Pen and Jean-Luc Mélenchon have proposed programmes that challenge aspects of the EU’s economic framework, particularly on fiscal rules and state intervention, albeit from opposite ideological perspectives.
For investors, the key concern is fiscal credibility. France already faces high public debt and persistent budget deficits, leaving little room for costly spending pledges without raising concerns over borrowing costs and financial stability. Beyond markets, the election could also shape France’s role in driving EU initiatives on defence, industrial policy and economic integration. The outcome will therefore matter not only in Paris, but also in Brussels, Frankfurt and financial centres across Europe.
In the meantime
Regardless of who ultimately reaches the Élysée Palace, the economic significance of France’s next presidential election extends well beyond national politics. With public finances under pressure, Europe confronting renewed geopolitical challenges and investors closely monitoring fiscal credibility, the campaign is likely to become a referendum on competing visions of the French economic model. Whether voters choose continuity or a more radical departure, the result will shape not only France’s future but also the direction of the euro area’s second-largest economy.
