BarroMetrics Views: The French Elections and You
To understand the impact of the French elections on the US and thus the other parts of the world, we need only compare US-EU trade relations.
Here’s how European Commission describes the US-EU trade picture:
- Total US investment in the EU is three times higher than in all of Asia.
EU investment in the US is around eight times the amount of EU investment in India and China together.
- EU and US investments are the real drivers of the transatlantic relationship, contributing to growth and jobs on both sides of the Atlantic. It is estimated that a third of the trade across the Atlantic actually consists of intra-company transfers.
- The transatlantic relationship also defines the shape of the global economy as a whole. Either the EU or the US is the largest trade and investment partner for almost all other countries in the global economy.
- The EU and the US economies account together for about half the entire world GDP and for nearly a third of world trade flows.
So, any disruption to the US-EU trade would be significant at any time but especially now as both grapple with the effects of barely reviving economies.
With that in mind, let’s have a look at the candidates for April 23 and the process for determining who will go into the second round on May 7. The percentage after the name is the latest poll result from PresoTrack OpinionWay (Margin of error is 2.2%).
- Emmanuel Macron 23% (remain in EU)
- Marine LePen 22% (exit EU and freeze Immigration)
- Francois Fillon 20% (remain EU)
- Jean-Luc Melenchon 19% (but has seen a huge surge in past few weeks) (renegotiate EU and if renegotiation is unsuccessful, withdraw EU).
If no candidate wins 50% of the vote, then the two top contenders will run-off on May 7. I have been unable to determine what would happen if two of the contenders tie on Sunday. For example: LePen 25%, Macron 24%, Melenchon 24%.
I give little chance that Fillon will overcome his scandal taint. I believe Melenchon’s recent momentum provides him with an opportunity of challenging Macron and LePen.
The polls suggest that LePen will win the first round and lose the second, irrespective of whoever is her challenger: Macron will win with 64% of the vote and Fillon will win with 58% of the vote. Against Melenchon: “According to the polls, he beats her by a greater margin than François Fillon but a smaller one than Emmanuel Macron.”
The wild card in the mix is voter turnout. It’s expected to be a record low, but from all reports, Le Pen has a motivated base (akin to Trump). If the voters (for all candidates) turn up in the numbers expected, I do see a Le Pen victory.
I’ll finish this tomorrow. Yes, I know it’s Saturday. Still, I’d like to get in my two-cents in before Sunday’s election although we probably won’t know the results until Monday afternoon (HK time).