Coalition calculations in France

French President Emmanuel Macron’s move to hold early elections has left the new parliament hanging in the balance, while coalition strategies are slowly taking shape. The left-wing alliance New Popular Front, which finished ahead in terms of the number of seats, is expected to present its prime ministerial candidate to Macron within a few days. One of the leading candidates is Senator Yannick Jadot, a member of the alliance’s Green Party. Jadot stated that they will present their government proposals this week, and said, “We need a prime minister within our group who is conciliatory, who will bring calm to the country and who can find a majority around the major reforms that the country needs.” In order for the left-wing alliance to form a government, Macron’s party needs support. However, the reluctance of Jean-Luc Melenchon, leader of the major alliance party Unyielding France, to cooperate with Macron’s party is confusing the calculations. The euro/dollar exchange rate, which closed down 0.2 percent on Monday with the uncertainty in France, is flat today at 1.0828. As the tense wait continues in the bond market, traders expect that if the coalition does not produce a result, this will be reflected in returns. TwentyFour Asset Management Portfolio Manager Gordon Shannon stated that the situation of not being able to find the balance to form a government deserves an increase in the risk premium.