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Investors urged to keep calm as vote in France approaches

By Julian Shea in London | China Daily Global | Updated: 2024-06-25 06:33
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This file photo shows the Euronext's stock price indicator display at Euronext building in La Defense, on the outskirts of Paris, on May 10. [Photo/Agencies]

The head of Europe's biggest stock exchange group has urged business leaders to stay "calm" in the run-up to France's snap elections for the national assembly that are set to take place at the end of June and in early July.

President Emmanuel Macron called the surprise election after the far-right National Rally party, also known as RN, did well in France's European Parliament election at the start of June.

Speaking to the Financial Times newspaper, Stephane Boujnah, head of Paris-based Euronext, said the two extremes were "a concern for the future of the French economy" but suggested that "everyone keep calm and wait until July 7 or July 8 to analyze the results".

Since the announcement that the country would be going to the polls, the value of France's Cac 40 stock index has gone down by around 5 percent.

Data published by Bloomberg showed that in the immediate aftermath of the election being called, the combined worth of stocks in France slipped to $3.13 trillion, wiping out all the gains made this year, and pushing it below the $3.18 trillion value of the London stock market.

RN has not yet published a detailed economic policy, but the party is on record as saying it would like to cut VAT on energy, and possibly lower the retirement age.

The rise of the right has also resulted in a group of parties on the left putting aside their often significant differences to present a unified front and avoid splitting the vote. The left-wing grouping would pursue a tax and spend approach.

However, despite the rival groupings currently dominating the political debate, Boujnah said he did not foresee a situation where, should either one come to power, they would be able to break totally from Macron's policies and go through with their more radical proposals.

"I can hardly imagine that in the event one of these two forces gets into the office that they will be able to implement everything they promise because of the combination of rating agencies and unions," he said.

Boujnah added that there was a big difference between aims and practicalities, and that the rivals would need to admit this at some point.

The big question was "how long will it take for them to water down explicitly their ambition", he said, adding that there was a difference between "propos(ing) things that sound (and) smell extreme" and running a country and being "confronted with complexity".

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