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France announced the results of the first round of voting in the National Assembly elections, and this result caused a lot of volatility in the market.
What really happened in this election?
Why are investors worried about the outcome of this election?
What will be the final impact of this election on the eurozone?
1. The results of the first round of voting in the French National Assembly election.
The first round of voting in the French National Assembly elections is over.
According to the French Ministry of the Interior, the voter turnout in the first round of the election reached a 40-year high of 48.7 percent, up from 42.8 percent in 2017.
In this election, a total of 7,786 candidates participated in the elections, who ran in 96 constituencies throughout the country, and in the end a total of 5,835 candidates participated.
The elections will ultimately elect 577 members of the National Assembly, 11 of whom will be elected by candidates elected by the French diaspora.
This election is the 16th National Assembly election in France and the third National Assembly election under President Emmanuel Macron's tenure.
In this election, there are three main camps: the right-wing camp, the centrist camp and the left-wing camp.
In this election, President Macron's party, Forward Republic, has opted to lean to the left, and they will cooperate with left-wing political groups.
In addition, President Macron made it clear during the election that if the right-wing political group wins the election, then he will step down and resign.
The most interesting thing in this election is undoubtedly the far-right party National Alliance, which is in the spotlight both inside and outside France.
Lin Biao once said that "send a division of soldiers to pacify the affairs of a regiment", and this sentence is not only used in the army, but also in politics.
As a politically extreme group, the National Rally is no less influential than a political group, having been courted by the French public two years ago, but ultimately failed to make it to the National Assembly.
How did the National Alliance perform in this election?
In the first round of voting, the far-right National Alliance received 23.3 percent of the vote, the most of any party.
But even with the addition of the National Alliance's coalition partners, they received only 28.4 percent of the vote, not 10 percentage points ahead of Macron's centrist party, La Repubblica, as some media outlets claimed.
Another party that is thought to be the better performer in this election is the conservative Republican Party, which is an alliance partner with the National Alliance.
But in this election, they came in third with just 8.5 percent of the vote.
In second place in this election was the left-wing political group New Popular Front, which received 16% of the vote.
President Emmanuel Macron's centrist party came in third with 11.2 percent of the vote.
According to the situation in this election, President Macron's party is likely to suffer a crushing defeat in the second round of voting, in which President Macron's centrist party will be replaced by the left-wing party of the New Popular Front.
Therefore, the outcome of this election is likely to lead to a suspended parliament in the French National Assembly, which will also increase political and economic uncertainty in France.
Second, the election results have caused uncertainty in the market.
Soon after the poll, various markets reacted to the news.
According to Reuters, the French stock market opened on May 10, and France's FTSE Emerging Index fell 1.3%, which was also the largest one-day decline in the French stock market this year.
Among European stock markets, the French stock market also fell the most, more than the overall decline in European stock markets.
In addition to this, the French bond market, like the French stock market, was the biggest decliner.
The price of 10-year bonds in France fell by 0.13% after the announcement, which also shows that the market is very worried about the political and economic situation in France.
So why is there such a big concern about the political and economic situation in France?
The fact that the far-right political group has won such a high percentage of votes is bound to have a very large impact on French politics.
On the one hand, if this political group wins the elections, then they will have a very large influence on French policy.
In this election, far-right political groups and the Republican Party are coalition partners, so if this coalition wins the election, then they will make significant changes to French policy.
In line with their policy direction, they are more focused on the domestic development of France and less on the development of European integration.
Therefore, they will have contradictions with the EU on many issues, which will also have a very big impact on the political situation in France, and may even lead to political instability in France.
On the other hand, far-right political groups have put forward a series of policy options that will have a very large impact on the French economy.
During the election, far-right political groups proposed a series of tax proposals that related to France's economic policy.
They offered to tax France's wealthy, but they also proposed to spend heavily on the populace.
A large part of these expenditures are used to reduce the burden on the population, which will have a certain impact on the French economy to a certain extent.
In this respect, there are certain similarities between far-right and left-wing political groups, both of which tax the rich and spend heavily on the populace.
On the one hand, their policies are very similar, but on the other hand, their views on immigration and nationalism are somewhat conflicting.
The policy direction of far-right political groups is border closure, while the policy direction of the left wing is to open borders.
Therefore, there is a conflict between their policy directions on these two aspects, which will also have a very large impact on the political situation in France.
In this election, the left-wing political group New Popular Front performed very well, with 16% of the vote, ranking second.
This performance shows that the left wing is also a very important political force in the French political camp, and it also shows that the French left-wing political groups will get very good results in the second round of voting, which will undoubtedly create a very large uncertainty about the political situation in France.
Therefore, this result has raised concerns in the market, which are not unfounded.
In the market, the French stock and bond markets are arguably the worst performers, while French bank stocks are also the most likely to fall.
On May 10, French banks fell by 2.5%, the largest decline, and among European stocks, the French stock market fell by 1.6%, the largest decline.
On this day, the European stock market fell by 0.6% overall, while the French stock market fell the most, which also shows that the French stock market is very unoptimistic about the outcome of this election.
3. Investors' concerns.
There are good reasons why investors are so worried about the outcome of the French elections.
The far-right and left-wing political groups performed very well in the elections, which also shows that the French people are very divided on some issues.
One of the biggest differences is the perception of immigration, with far-right political groups taking a very hard line on immigration, and they have proposed to close France's borders, which has also raised concerns among some French citizens.
Far-left political groups, on the other hand, are very open to immigrants and offer to help them and provide them with better living conditions.
On the one hand, this has also raised questions among some French people, who believe that if too much aid is given to immigrants, it may lead to financial difficulties in France.
On the other hand, far-right political groups have a very strong view of nationalism, believing that France is French and that foreigners cannot be allowed to occupy France.
Far-left political groups, on the other hand, believe that France is the home of all immigrants and welcome all immigrants from all countries.
On the one hand, this has caused a very large disagreement among the French people, and at the same time, it has also caused the political situation in France to become very complicated.
In this regard, Lechert, a spokesman for far-right political groups, said in an interview with reporters that they will get more votes in the second round of voting, which will also have a very big impact on the European Union.
Melancho, a spokesman for far-left political groups, also told reporters that they would get more votes in the second round of voting, which would also create more trouble for the European Union.
As a result, investors are very worried about the outcome of the elections in France.
Another reason is that in the elections, far-right and left-wing political groups have a very strong influence on France's fiscal policy.
In this regard, far-right political groups have proposed to tax the rich while spending heavily on the population.
This aspect will also have a very large impact on the French bond market, and investors are worried that this policy plan will have a very large impact on the French bond market, and may even lead to a debt crisis.
Left-wing political groups also impose high taxes on the rich and high expenditures on the people, which will also have a certain impact on the French bond market.
As a result, investors are very concerned about the French bond market after seeing this result.
In this regard, the ECB is likely to take some steps to stabilize the market.
On this day, ECB officials said in an interview that the ECB will intervene in times of extreme conditions in the market in order to maintain stability in the eurozone.
At the same time, ECB officials also said that the ECB will closely monitor the development of the political situation in France and stabilize the market in case of problems.
epilogue
In the first round of the French National Assembly election, the far-right National Alliance led with 23.3% of the vote, but this was not as strong as expected.
Macron's centrist party, Forward Republic, came in third with 11.2 percent of the vote, slightly better than expected.
The market reacted negatively to the expectation of a suspended parliament in the National Assembly after the second round of voting, with the French stock market falling 1.3%.
Investors are worried about the tax spending plans of far-right and left-wing groups, and the European Central Bank may take action to stabilize the market, and the market will continue to monitor the political situation in France.