The French ‘Trump Moment’? The Fight between Pro-Europeans and Nationalists


Executive Summary

  1. Increased living costs in France are at the center of the debate in the presidential run-off between the incumbent Emmanuel Macron and his far-right challenger Marine Le Pen on April 24.

  2. While Macron is betting on a major investment plan aimed at boosting France's productivity, Le Pen has chosen the national checkbook method, promising to “return money to the French”.

  3. France’s foreign policy is at a crossroads as French voters will decide between multilateralism and European integration, or a withdrawal from NATO’s command and a threat to western unity.

Implications for International Business

  • Discontent over welfare reforms and rising food and fuel prices will cause large-scale protests regardless of the election outcome, possibly disrupting operational flows and logistics.

  • A Le Pen victory would additionally worsen France’s business climate due to a protectionist, anti-globalization agenda already rattling French bonds and banking stocks.



State of Play Tough battle on spending power and political restructuring: nothing is decided yet

The first round of the presidential election marked the end of the two traditional governing parties, the historic Gaullist party, Les Républicains (4.78%), and the Socialist Party (1.77%). Both alternated in power between 1958 and 2017, when centrist reformer Emmanuel Macron from En Marche became President. The incumbent will face off Marine Le Pen from the far-right Rassemblement national in a second round. Poll projections suggest a tight race. Despite a faster than expected post-Covid-19 economic recovery, purchasing power and the cost of living are the main campaign themes. In the face of Russia’s war against Ukraine exacerbating already high inflation, other themes such as the pandemic, climate change, immigration, and security were eclipsed. Moreover, the next president will face the challenge of securing a cohesive parliamentary majority in subsequent legislative elections. Even if Macron prevails in the presidential contest, En Marche is expected to lose seats in the National Assembly, making it necessary to broaden their alliance to govern effectively. In turn, a Le Pen victory would inevitably lead to a new French "cohabitation" as voters try to block a far-right parliamentary majority. The pension reform that Macron promised in 2017 but postponed due to the ‘Yellow Vests’ motorists protests and the pandemic, is expected to cause a political stir with massive social unrest in the coming months.

Key Issues Protectionism vs. economic reforms: the election’s economic implications

Emmanuel Macron sticks to a strategy of investment in the French manufacturing industry, as evidenced by his recent France 2030 plan, aimed at fostering innovation and industrial revival. The plan foresees spending 30 billion EUR on the ecological transition including reducing of carbon emissions as well as on the digitization and revitalization of industrial sectors like automotive, aerospace, biotechnology and healthcare. In parallel, Macron is committed to attracting foreign investors with his "Choose France" program. As announced in January 2022, this program’s fifth annual campaign is expected to inject more than 4 billion EUR into the French economy. Among the 21 new, mainly industrial projects are companies such as American chemicals firm Eastman, which is building a new plastics recycling plant in France. Unlike Macron, Marine Le Pen targets working-class core voters and defends above all measures of redistribution and social protection. In the absence of a real innovation policy, Le Pen sells a softened protectionism with focus on strengthening import controls, protecting the French economy from perceived unfair competition by ending posted work of employees carrying out a service in another EU member state on a temporary basis, prioritizing small and medium-sized companies in public tenders, and revising free trade agreements deemed not in France's interests. Le Pen also favors replacing the current property tax with a wealth tax directed at the rich, exempting primary residences.


The two presidential candidates share a common desire to lower taxes without reducing public spending. Economists warn of the risk of deficits and debt slippage. Macroeconomic projections show that Le Pen's program, which blames the debt of previous governments, would increase it by five points of GDP, exceeding 3500 billion euros, 237 billion euros more than Macron's program. With the two programs, France's trade balance should also still be in deficit in 2027 (-2.6% and -2.8%).

Macron vs. Le Pen: High stakes for Europe and the West

As the second largest EU economy, with the only EU seat in the UN Security Council and as the EU’s sole nuclear power, France plays an important strategic role. The current presidential election therefore constitutes a defining moment for France’s foreign policy. While Le Pen’s priority is to withdraw from international institutions in an attempt to regain sovereignty and independence, Emmanuel Macron is convinced that France's interest lies in becoming more involved in global affairs through multilateral organizations. Macron strives for European sovereignty in response to supranational challenges, such as European defense, energy self-sufficiency, rising public debt, and future pandemics. After her defeat in 2017, Le Pen formally renounced her plans for a French departure from the Euro area (“Frexit”). A Le Pen victory now would still have a major impact on European governance. As a Eurosceptic, she plans to create an “Alliance of Free and Sovereign Nations” with Poland and Hungary to gradually replace what she sees as a “Federalist European Union”. This is a strong risk of political paralysis, both in Paris and in Brussels.


Beyond the EU, Macron is also more committed to a strong transatlantic alliance. Despite characterizing NATO as “brain dead” in 2019 amidst the lack of coordination between then-US president Donald Trump and Europe as well as the unilateral behavior of Turkey, Macron strongly supported the alliance in the wake of Russia’s war on Ukraine. In turn, Le Pen opts for a French withdrawal from NATO's integrated command, claiming that the alliance’s Eastern expansion is the main reason for the war in Ukraine. Le Pen’s party has maintained strong ideological and financial ties with the Kremlin, receiving public support from Russian President Vladimir Putin in 2017 and several loans from Russian banks. Le Pen advocates for a strategic convergence between NATO and Russia within a new security architecture in Europe. Despite the US-French quarrel over a multibillion deal to supply Australia with submarines, US President Joe Biden and Macron are now on solid terms. At a time when Washington is trying to strengthen a Western coalition by relying in particular on Paris, the rise of a nationalist-populist candidate who is very critical of NATO and close to Russia is not reassuring across the Atlantic.