Is the success of far-right politics threatening the European economy and its appeal to international investors?
That is the question investors seem to be asking in the wake of a landslide European election victory for Marine Le Pen’s far-right Rassemblement National, French President Emmanuel Macron’s surprise call for a snap election, and shock news of an unlikely alliance between parties of the French left.
The Cac 40 plunged to its worst week in two years after the election was called and erased much of the gains for the year, while bond yields jumped. The spread between French and German bond yields has widened to levels not seen in not seen in the past seven years. Meanwhile, the French finance minister warned that France was headed for a financial crisis.