# As Good As It Gets?
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2017-05-16
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: French Election Analysis: Market Reaction and Future Uncertainties
Meta Description: John Wyn-Evans discusses the impact of the French election on European markets and the potential challenges ahead, including Italy's upcoming general
Tags: featured
Tag URLs: featured (https://financedigest.com/tag/featured)
URL: https://financedigest.com/as-good-as-it-getshtml

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By **John Wyn-Evans,** Head of Investment Strategy at Investec Wealth& Investment

I can’t remember such detailed reporting of a French election by the British media which is testament to the divisive nature of this contest and the possible existential threat posed to the whole European project by Marine Le Pen. Markets, guided by opinion polls, had already made up their mind about the result so the sense of euphoria is actually somewhat muted, but we have no complaints about the outcome.

Of course, it is in the nature of financial markets these [days immediately to focus on the next](https://www.financedigest.com/markforged-announces-the-metal-x-gen-2-next-day-metal-and-the-x7-field-edition.html "Markforged Announces the Metal X Gen 2, Next Day Metal, and the X7 Field Edition") possible pitfall, and there are two that present themselves. First there are France’s legislative [elections to the National Assembly](https://www.financedigest.com/quebecs-elected-officials-must-swear-oath-to-king-charles-to-sit-in-national-assembly.html "Quebec’s elected officials must swear oath to King Charles to sit in National Assembly") on June 11th, when we will see whether or not M. [Macron can consolidate](https://www.financedigest.com/frances-macron-consolidates-poll-lead-after-tv-clash.html "France’s Macron consolidates poll lead after TV clash") his position with a parliamentary majority. In truth, this looks like a tall order for his En Marche! Party which now has to find 577 candidates to field. Even so, there is a fighting chance that a working coalition can be formed with other parties to push through a reformist agenda. Matters can hardly be much worse than under Francois Hollande’s lame duck regime.

Looming larger is Italy’s forthcoming general election, which has to take place by May 2018. For Marine Le Pen, read Beppe Grillo; for the National Front, read the Five Star Party (5\*). Although 5\* is not, perhaps, as ideologically extreme as the National Front, it is definitely anti-establishment and not a fan of a more integrated Europe. But the threat is tempered by the fact that it is only polling around 30% of the vote (neck and neck with the Democrats) so would need to form a coalition to pursue its aims. Furthermore, a referendum on membership of the euro would require constitutional change, and former [Prime Minister](https://www.financedigest.com/liz-truss-resigns-after-six-weeks-as-uk-prime-minister.html "Liz Truss resigns after six weeks as UK prime minister") Renzi’s attempts to do just that failed last year, suggesting an underlying resistance to big changes within the country. In any event, you can expect a sharp increase in the volume of commentary on [Italian politics](https://www.financedigest.com/european-shares-rebound-with-focus-on-italian-politics-earnings.html "European shares rebound with focus on Italian politics, earnings") once a firm date is set, and markets to enter another period of uncertainty.


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