Since the surprise announcement on Sunday evening by President of the Republic Emmanuel Macron to dissolve the National Assembly, a period of political uncertainty has begun and the Paris stock market has been in turmoil. Destabilized by this situation and the possibility of seeing a representative of the National Rally (RN) settle in Matignon, the Cac 40 is experiencing difficult sessions, notably with the rise in the French ten-year borrowing rate. A continuous increase which yesterday widened a record gap since 2020 with the German 10-year rate, a sign of investors’ growing mistrust of France’s credit quality and its ability to honor its debt. Another sign of this concern: the rating agency Moody’s indicated on Monday that it expected “a deterioration in the sustainability of French debt” as well as “an increased risk of political instability”.
Already, the dissolution of the National Assembly is having consequences since the cost of the debt is increasing. At the same time, shares are tumbling, in particular those of the big French banks – BNP Paribas, Société Générale and Crédit Agricole – but also the media, TF1, M6 and NRJ Group in the first place. The reason ? The RN program provides for the privatization of public broadcasting in the event of victory, which would have a very negative impact on current private broadcasting players.
On the side of business leaders, there is also concern. “This instability will have consequences,” warns François Asselin, president of the Confederation of Small and Medium Enterprises. “We are in a waiting period. Simply put yourself in the place of a business leader who must today ask himself the question of investment or even recruitment, hiring. He risks saying : ‘I’m still going to wait a few weeks before knowing how tomorrow and in which direction our country will go’, it’s completely legitimate”, he says.
In the current political cacophony, Alain Minc, who was Emmanuel Macron’s mentor for a long time, stunned by the announcement of the dissolution, denounces a “historic error”. “It will be chaos at best, the RN at worst! Chaos at best, that is to say an Assembly where there is not an absolute RN majority, but ungovernable with three unequal thirds and there too we must clearly see the texts: the impossibility of dissolving before a year therefore a political chaos, a political crisis, much worse than under the Fourth Republic or an absolute majority RN and that is what I call the worst” affirmed the essayist at the microphone of #cdanslair.
So after this dissolution of the National Assembly, what economic and financial consequences? Why is the Paris Stock Exchange in chaos? What does the increase in French borrowing rates over 10 years mean?
Our guests :
Jérôme Jaffré, Political scientist – Associate researcher at CEVIPOF
Dominique Seux, Deputy Editorial Director – “Les Echos”
Nathalie Mauret, Political journalist – Ebra regional press group
Guillaume Daret, Deputy head of the political department – France Télévisions
