In France, Investors Get the Centrist Limbo They Wanted
Polarisation has for years left the country’s politics stuck in an unpopular middle ground, and the latest elections won’t change that
Polarisation has for years left the country’s politics stuck in an unpopular middle ground, and the latest elections won’t change that
When it comes to France’s turbulent politics , the current impasse is probably the best investors could have hoped for.
The second round of French legislative elections delivered a widely expected hung parliament, but not its predicted makeup: Rather than coming in first, Marine Le Pen ’s far-right and anti-immigrant National Rally finished third. In a shock twist , the leftist New Popular Front alliance emerged victorious, with the party of President Emmanuel Macron and its allies in second place.
This is because leftists and centrists ended up coordinating. In many local races, candidates dropped out to avoid dividing the vote against the far right. Still, no party has an outright majority, which plunges the country into political gridlock. This was, counterintuitively, the preferred outcome for financial markets.
The CAC 40 initially tumbled when the elections were called in June, driven by fears of a potential National Rally government challenging the European Union with fiscally expansive plans. Then the French stock benchmark perked up, as the first-round results suggested that the far-right wouldn’t get a majority.
Yet markets remained volatile because the rise of the New Popular Front raised even greater concerns. The policies of this coalition, in which leftist firebrand Jean-Luc Mélenchon is a key leader, also include more public spending, on top of widespread tax increases. Indeed, the CAC 40 closed down 0.6% Monday, probably reflecting investors’ concerns about these parties potentially managing to form a new government. Mélenchon has stated that there will be no deals with the centrists.
These worries seem overblown. Yes, there are doubts about how France will handle its budget deficit, which amounted to 5.5% of gross domestic product in 2023 and has forced the EU to launch an “excessive deficit procedure” against the country. Macron may need to accept the reversal of reforms such as a higher retirement age.
Still, a fiscal crisis isn’t in the cards, because the European Central Bank is ultimately in control of France’s bond market.
As for economic growth, it is unclear how much impact Macron’s policies have had in the first place, particularly given resistance from unions and swaths of the public, which resulted in the famous “yellow vest” protests in 2018 and 2020.
What matters for sectors battered in the stock market, including banks, energy firms and infrastructure operators, is that the risk of widespread tax increases, nationalisations and a prolonged standoff with Brussels seems smaller now than a few weeks ago. Whatever Mélenchon says, the left will either have to compromise or else form a minority government that might scare investors but wouldn’t be able to pass laws.
So there isn’t much justification for the lower valuation of lenders such as Société Générale and especially BNP Paribas —one of Europe’s most interesting banks that now trades at 0.65 times tangible book value. The same is likely true for firms such as energy utility Engie and infrastructure-concessions leader Vinci , which have lost 8% of their market value since the end of May.
These elections are more a symptom of Macron’s weakness than its cause. After a chaotic month, French politics is back where it has been for years, with a rising far right forcing the left to back a centrist platform that can achieve little because few people actually like it. Macron himself became president on an anti-Le Pen ticket, but in seven years has failed to rally broad support for his pro-business vision.
This could eventually make Le Pen’s victory inevitable, as she claimed after initial results came in. For now, though, it is more or less what markets ordered.
This stylish family home combines a classic palette and finishes with a flexible floorplan
Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.
It’s easy to buy clunkers when you’re caught up in the moment. But regrettable purchases aren’t inevitable.
Trying to buy just the right souvenir on a trip is a risky business. You can wind up with a lifetime treasure—or an albatross you feel stuck with forever.
Consider the giant painting of a chicken flying out of Cuba that has been hanging over our couch in Palos Verdes, Calif., for the past 15 years. Buying it cheaply seemed to make sense when we were in Havana, since my husband’s family had fled the country after the revolution.
But the flying chicken just didn’t seem as, well, poignant by the time we returned home and hung the 4-by-7-foot painting. No guest has ever said a word about it. “I can’t help you with the chicken,” an art dealer told me long ago when I asked for help in selling it.
So, how do you find the right souvenir? Or is there even any such thing?
For many people, the answer to the second question is an unqualified “No,” and they have stopped trying. “Souvenirs never look as enticing or beautiful as they did at the time of purchase once you get them home,” warns Patricia Schultz, the author of “1,000 Places to See Before You Die.”
After collecting rugs on her trips, then Christmas ornaments, before running out of room at home for both, Schultz says, “I have gone cold turkey. I collect memories.”
But for others, surrendering just won’t do. “It’s intrinsic when people travel that they wind up bringing a keepsake of the journey,” says Rolf Potts, the author of “Souvenir,” a book that traces the history of travel souvenirs back to the earliest recorded journeys.
“It can be a way to show off,” he says. “Much like the envy-inducing travel posts on Instagram.” But for many people, he says, “It’s proof you were there, not only to show other people but also for yourself.”
For those who lean in this direction, there are ways to help avoid regrets. Tara Button , founder of the Buy Me Once website, and the author of “A Life Less Throwaway: The Lost Art of Buying for Life,” suggests focusing on practical items that fit your lifestyle and double as mementos.
As an example, she once bought a “very affordable” baby blanket made from alpaca fiber on a trip to Peru and now uses it every day. The blanket not only reminds her of “the time pre-children when I was traveling,” she says. “It goes over my 2-year-old son every night. It’s always soft and always gorgeous.”
She has a friend who collects one cup from each destination. “Those are perfect memory keepers,” she says. “A small item that is used every day.”
One obstacle to finding the right souvenir is that it can be hard to think practically when you are swept up in the excitement of a new culture. Consider the Burmese puppet, 15 inches tall, that has spent about two decades in the closet of Liz Einbinder , head of public relations for Backroads, an adventure-tour company.
“We saw a lot of puppets everywhere and just got caught up in all of the Burmese art and culture,” she says. Now she wonders, “Why did I bring this back? It sits in the back of my closet and I can’t seem to get rid of it. It creeps me out when I see it.”
When that buying urge sweeps over you, Button and other travel experts suggest pausing to consider your lifestyle, taste, needs, and the scale of your home—you’re going back to the reality of your everyday life, after all.
But that doesn’t necessarily mean being entirely practical. Einbinder collects miniatures, mostly miniature houses, from every country, and has more than a hundred. Most are in storage, but she keeps a little London bus and a little Egyptian pyramid on her desk. For her, souvenirs aren’t just about memories, they’re also about the hunt. “It gives me something to search for” on each trip, she says. “That’s half the fun.”
Another way travelers often go wrong is by giving in to pressure, or at least persistence, from salespeople.
When Kimba Hills, an interior designer, went to Morocco, she hired a guide who took her to a rug store in Fez, where the dealers delivered a whirlwind sales pitch while serving tea. She wound up buying a $4,000 flat-weave Turkish rug, measuring about 13 feet by 9 feet.
“No one in my group could believe I got seduced,” she says.
When the rug finally arrived at her home in Santa Monica, “It smelled like cow dung,” she says. Washing the rug was going to change the color.
When she called the dealer in Fez and demanded her money back, he refused, offering to send her a different rug instead. “We got into a yelling match,” says Hills. “All my skills went out the window.”
Looking back, she says, “You are in a buying mode because you are there and feel like you should buy something.” On a recent trip to Mexico, she bought nothing, explaining, “I’m wiser.”
Spontaneity can cut both ways. There’s the chicken painting. But waiting for inspiration to strike, rather than planning to go home with a souvenir, can still help.
Henry Zankov, a sweater designer, says that when he travels, he explores his destinations with the idea that he won’t buy anything unless he comes across something he loves. He still buys plenty, but says “I don’t have regrets.” At his home in Brooklyn, he has ceramics, vases and glassware from shops he found randomly in Spain, Greece, and Italy. “I buy what I have to have,” he says.
There are times he doesn’t find anything. “So I just give up,” he says. “It’s OK.”
Some souvenirs do become the treasure of a lifetime.
Annie Lucas , the co-owner of MIR, which offers tours to less-traveled destinations, became captivated by a mirror on a trip to Morocco. It was made with hand-pounded silver and pieces of camel bones.
She went back to the store three or four times, debating the cost and whether she would regret it once she got home. It was heavy and measured 24 inches by 40 inches.
“That was 15 years ago, and I still treasure it,” she says. “If I had to get out of my house and had only five minutes to pack, I would grab that off the wall.”
This stylish family home combines a classic palette and finishes with a flexible floorplan
Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.