I was telling you about fragmentation yesterday, in the global economy and in financial markets. Tonight in France, we are witnessing a manifestation of that fragmentation in the political sphere.

We already knew that the newly reelected French President Emmanuel Macron would have trouble achieving an absolute majority. The real results are a lot worse than expected.

At the time of this post, president Macron’s coalition, ENSEMBLE! barely reached 234 (compared to 336 previously, a decline of 102 seats). The left wing NUPES reached 141 (60 previously, an increase of 81 seats). The traditional Right Wing Les Républicains/Other Various Right got 75 (119 previously, a decline of 44 seats), Rassemblement National 90 seats (8 previously, an increase of 82 seats).

Clearly, we are in that second scenario that I told you about few days ago. However, a lot worse scenario than what I described. 

Ensemble! Macron’s coalition did win a relative majority, but way below the threshold of 289 seats. President Macron will now have to rely on the Right Wing Les Républicains, but that’s not even guaranteed. He can also extend himself to the left wing and pull some occasional support from some of the left wing partners within the NUPES coalition or from the left wing parties that have not joined the NUPES. It will still be possible for Macron to expedite his reforms but on a case by case basis and probably on a much harder line than in the previous scenario.

However, at the same time the left wing NUPES will also rely on its large number of seats (141) to create opposition and harden the debate. 

The much better than expected result from the far right Rassemblement National will also create further undercurrents of turbulence. Despite Macron’s ability to rely on the right wing Les Républicains, expect very hard debates, leading to a tense social climate, that some already call the “Fourth Round”.

Overall, this new National Assembly appears very difficult to lead in the foreseeable future.  

Should President Macron find it impossible to gather the support he needs, he may have to call for new general elections to reshuffle the parliament, but only after one year.

In the meantime, expect some heavy turbulence, especially on any topics related to France’s commitment to European treaties.  Indeed, if you take the number of seats of parties that are openly eurosceptic, we end up with 30% of the parliament. That’s enough to create tense debates in the coming legislature.

That’s what I wanted to share with you for the time being,

Let me know if you have questions and I look forward to hearing your thoughts. Feel free to comment.