By Michel Rose, Elizabeth Pineau and Tassilo Hummel

PARIS  – Political parties and business leaders alike tried to figure out what a possible far-right win could mean for France following President Emmanuel Macron’s decision to call a snap election after a bruising loss in a European Parliament ballot.

Macron’s shock decision offers the far right a shot at real political power. Amounting to a roll of the dice on his political future, it immediately sent the euro down and hit French stocks and government bonds.

A source close to Macron said the 46-year-old leader, whose power has been diminished since he lost his absolute majority in parliament two years ago, calculated that there was a chance he could win back a majority by taking everyone by surprise.

But if Marine Le Pen’s National Rally (RN) does take over, the source said, the gamble is that the next three years would demonstrate their incompetence to voters and undermine their bid for the presidency in 2027.

But that is not without risk, that source said.

“I knew this option was on the table, but when it becomes reality it’s something else,” they said. “I didn’t sleep last night.”

Voting will take place in two rounds on June 30 and July 7 for 577 lawmakers. The next government will take over in July.

For Le Pen, the challenge is to transform her rising popularity into a win at home too. The vote is likely to revolve around discontent with Macron’s style of power, cost of living and immigration policies, but also about whether the RN can be trusted to run a major European government.

“Everything points to the RN winning a relative or absolute majority,” Emmanuel Pellerin, a lawmaker from Macron’s Renaissance party, told Reuters. “But that forces the French to think about what is at stake.”

Even if the eurosceptic, anti-immigration RN did score a majority, Macron would remain president for three more years and still be in charge of defence and foreign policy.

But he would lose the power to set the domestic agenda, ranging from economic policy to security and immigration to finances, which would in turn impact other policies, such as aid to Ukraine, as he would need parliament’s backing to finance any support as part of France’s budget.

Leaked Poll

The early election will also come shortly before the July 26 start of the Paris Olympics, when all eyes will be on France.

“This will be the most consequential parliamentary election for France and for the French in the history of the Fifth Republic,” Finance Minister Bruno Le Maire told RTL radio, referring to Charles de Gaulle’s 1958 constitution, considered the starting point of modern French politics.

Among policies put forward by the party, the RN has proposed higher public spending, despite already significant levels of French debt, threatening to further raise funding costs at banks.

It also wants to expel more migrants, stop family reunification, restrict childcare benefits to French citizens, give French nationals preference in access to social housing and jobs and withdraw residency for migrants who are out of work for more than a year.

The euro fell 0.5% in early European trade, while Paris blue-chip stocks dropped by as much as 1.9% at the opening, led by steep losses in banks BNP Paribas and Societe Generale.

Motorway operators Eiffage and Vinci also traded around 5% lower. The RN has proposed to nationalise French motorways to reduce road tolls by 15%.

The result is likely to depend on how committed leftist and centre-right voters are to the idea of blocking the far-right from power.

An unofficial poll from December showed the RN on track to double or triple its score and possibly obtain a majority.

Parties on the left and right were on Monday organising meetings and talking with each other to field candidates and discuss possible alliances.

Hung Parliament?

Eurasia Group said the RN was no shoo-in for a majority, predicting a hung parliament as the most likely scenario.

“We foresee a losing struggle for serious domestic reform or strict deficit reduction in the remaining three years of Macron’s term,” it said.

Helmed by 28-year-old Jordan Bardella, the RN won nearly 32% of Sunday’s (9) European Parliament vote, over double the Macron ticket’s 14.6%. The Socialists came within a whisker of Macron with nearly 14%.

Another source close to Macron said the president hoped to mobilize voters who abstained from voting on Sunday.

Some RN leaders appeared to have been caught off-guard.

“We didn’t think it would be immediately after the European elections,” RN deputy chairman Sebastien Chenu said on RTL Radio. Bardella will be the party’s candidate for prime minister, he added.

Macron’s Renaissance party currently has 169 lower house lawmakers out of a total of 577. The RN has 88.

-Reuters