Topical Thoughts

A New Republic?

You’d be forgiven for not knowing many of France’s prime ministers. The nation’s political system has in recent history put much more emphasis on a hyper-powerful president, who directs policy to a friendly and aligned National Assembly. This is an oversimplification, but nevertheless a useful practical understanding. It also no longer applies. President Macron’s decision to call a snap election has led to an extremely divided lower house. Any policy agenda, including a much-needed budget, will require negotiations spanning different ideologies. We ultimately think that the French political system, the economy, and financial markets, will cope with the new reality. But the necessary move to a political culture of compromise will see volatility, and the 2027 Presidential election looms large.