Corporate France faces political uncertainty and potential bankruptcies ahead of elections

From Investing.com: 2024-07-07 01:10:36

France’s business elite is concerned about political instability and potential bankruptcies ahead of Sunday’s parliamentary election. Far-right and left-wing parties aim to undo President Macron’s reforms. Anxiety is high, with worries about inexperienced leaders and increased taxes under a left-wing alliance. Corporate defaults may rise due to political disruption.

Far-right party RN could make 28-year-old Jordan Bardella France’s youngest prime minister if they win the election. Political uncertainty has raised France’s borrowing costs to 12-year highs compared to Germany. Investors are cautious, delaying major decisions due to political volatility. Corporate defaults may increase as financing costs rise for French companies.

Macron’s pro-business reforms faced backlash from voters, leading to violent protests. He struggled to connect with voters, seen as part of the privileged elite. RN plans to reverse Macron’s retirement age increase and cut taxes. Left-wing alliance wants to restore a wealth tax and increase minimum wage, potentially leading to a minority government with limited legislative ability.

Business leaders fear the impact of RN’s anti-immigrant policies on France’s future workforce. They stress the importance of attracting talent through immigration. Economic uncertainty and potential political instability have raised concerns among corporate investors. The outcome of Sunday’s election could have significant implications for the French economy.



Read more at Investing.com: Corporate France braces for new era of political turmoil By Reuters