France Avoids Far-Right Win but Faces Political Turbulence

Marine Le Pen's far-right party failed to secure victory in France's snap election, averting immediate risks to Europe's political landscape and economic policies. However, the resulting hung parliament may bring instability with a coalition government. Relief was felt across European allies, particularly regarding continued support for Ukraine.

Marine Le Pen's far-right party fell short in France's snap election on Sunday, averting potential disruptions to Europe's political and economic landscape. However, the resulting hung parliament poses new challenges for governance in France.

Concerns were particularly high among Ukraine's allies, who feared a Le Pen-led government might soften France's stance on Moscow and reduce military aid to Kyiv. Despite her party's recent rhetoric framing Russia as a threat, the National Rally's defeat signals a temporary halt to the far-right surge in Europe, although it means the new government will have to coexist uneasily with President Emmanuel Macron.

German Vice Chancellor Robert Habeck expressed relief that a right-wing landslide was avoided but warned of the challenges ahead for France and Europe. Polish Prime Minister Donald Tusk also commented positively, highlighting the mixed emotions across Europe's capitals.

Despite Macron's attempts to regain control by calling the snap poll, his party lagged behind a leftist alliance that unexpectedly took the lead. European leaders like Spain's Foreign Minister Jose Manuel Albares and Greece's Socialist party head Nikos Androulakis celebrated the defeat of the far-right, lauding the French people for upholding republican principles.

Messages of support also came from leaders in Mexico, Venezuela, and Colombia, with French society now facing the prospect of navigating deep political divisions. The newly split parliament sees three major factions—the left, centrists, and far right—each with distinct agendas and little history of cooperation.

This division complicates policymaking, particularly in budget control, amidst France's high deficit of 5.5% of GDP. Hard-right politicians voiced their discontent, with Italy's Claudio Borghi and Portugal's Andre Ventura expressing concerns about economic and immigration policies.

Economists warned that while the worst scenarios for investors were avoided, the fractious parliament could impede necessary fiscal reforms, potentially increasing tensions with the EU over compliance with budgetary rules.

(With inputs from agencies.)