France: What’s at stake and who is most likely to win the second round? - Rabobank

According to the analysts at Rabobank, looking at the French polls for the second round, Macron holds the best cards to win

Key Quotes

“The French Presidency is the most senior office and holds the highest political position and thus outranks all other politicians. The fact that the President has quite a few mandates, makes the position of President in France powerful compared to most other European nations. Among others, the President has a lot of authority in the fields of foreign policy and national security including being the commander in chief of the armed forces and access to the nuclear codes; just as is the case in the United States. He/she can also declare a state of emergency and in that case appoint an emergency government (without parliaments backing). In terms of domestic policy and agenda, however, the president is very much tied to the Assembly’s wishes.”

“Since France is part of the core of Europe, the elections carry implications for its future too. Macron is pro-European and will likely be cooperative in finding solutions to Europe’s most important challenges such as Brexit, economic reforms and integration and refugee issues. Le Pen, to the contrary, despises the European Union and wants to leave it as soon as possible. Consequently, in the case of a Macron win we could see a (modest) relief rally in financial markets and French spread vs. German bunds may decrease again. If, on the other hand, Le Pen wins the presidency we could see the opposite as her agenda may severely harm confidence in the French state to service its debt and the future of the euro.”

“Looking at the polls for the second round, Macron holds the best cards to win. Just before the first round he held a lead of more than 25 percentage points vs. Le Pen in the second round. In comparison, Remain led Leave by 1-2 percentage points in the Brexit polls and Clinton led Trump by 2-3 percentage points. The losing candidates of the establishment parties, Francois Fillon and Benoit Hamon, were quick to endorse Macron. The biggest risk for Macron is complacency among his (less committed) voter base, leading them to abstain and not turn out. Le Pen’s voters are much more loyal, though she has limited capacity to reach beyond her base (which indeed should be close to the number who voted for her in the first round). In the past, the second round had high turnout (around 80%), which should benefit Macron were that to happen again this time.”