France's far-right victory could have a domino effect

The historic gains of the far-right French Rally National party in the European Parliament elections on June 9th, and President Emmanuel Macron's shock decision to dissolve the National Assembly, have not only thrown France into a state of panic but are sending ripples through the wider economy.

In France, Europe's second-largest economy, stock markets have been hit this week amid growing expectations that Marine Le Pen's far-right party will likely do well in parliamentary elections scheduled for June 30 and July 7. Shares in France's three biggest banks, BNP Paribas, Credit Agricole and Société Générale, have fallen between 12 percent and 16 percent this week, according to Reuters.

The decline in bank shares, along with concerns about a political crisis in the country, boosted investor demand for government bonds to its highest weekly level since the height of the euro debt crisis in 2011, according to Reuters. Paris' CAC 40 stock index also fell 2.4 percent.

The prospect of Macron losing control of the National Assembly and the government is having a domino effect on the country's economic situation. Speaking to local radio station France Info on Friday, Finance Minister Bruno Le Maire warned that a new debt crisis could emerge if the National Rally wins the parliamentary elections, hypothetically comparing it to the fate of former British Prime Minister Liz Truss, whose brief 44-day term in office caused bond prices to soar in 2022.

While Macron's pro-business, pro-Europe policies have reassured investors since he came to power in 2017, the National Rally has had the opposite effect: His proposed measures include lowering the consumption tax and the retirement age, but his stance on Europe remains unclear.

François Godard, a senior media analyst at Enders and author of the recently published “Germany, France and Post-War Democratic Capitalism: The Rule of Experts,” says that because France is “Europe's main destination for foreign direct investment,” relationships with international financiers are crucial to the local economy. On the potential impact on the French media industry and ongoing consolidation, Godard said, “If foreign financiers start to withdraw, French companies will find it harder to borrow money, as interest rates will inevitably rise.” France is home to some of Europe's largest media groups, including Vivendi, Banijay and MediaOne.

As for what impact a far-right victory would have on the film and TV industry, insiders say the nationalist party will undoubtedly try to privatize public broadcasting services, including France Television. But unlike Italy, where far-right Prime Minister Giorgia Meloni took control of local broadcaster RAI with little resistance last year, in France, where the industry is mainly left-leaning and center-leaning, the Rally National would face fierce resistance. “France has a strong culture of public broadcasting, which has long celebrated its independence, and we have a very active watchdog, ARCOM, which will not allow a government takeover,” Godard says.

French film and TV producers are already sounding the alarm about the risks of having a far-right leader rule the country for the first time since World War II. Xavier Gens, director of the Netflix hit shark movie “Under Paris,” says it would be “a catastrophe overall, a catastrophe for French cinema.”

Gens claims the far-right wants to dismantle the country's unique system that allows freelance workers in theatre and other live entertainment, as well as film and television, to receive unemployment benefits.

“What makes French cinema and culture special is our cultural policy, which has always protected auteurism. If you take away these benefits from freelance workers and privatize public broadcasting, our industry will disappear,” said the director, known for films such as “Mayhem!” and “The Hitman.” “Our films are vibrant, diverse, they shine all over the world, at festivals and abroad. If the L'Assemblée Nation comes to power, it will all be over,” he continued.

Like far-right parties across Europe, France's far-right party, formerly known as the National Front, has seen its support grow in recent years since changing its name in 2018. It now presents itself as a more moderate, pro-social and patriotic party, but it remains underpinned by a xenophobic ideology.

French producer Daniel Ziskind has co-produced a number of films from the Arab world.
The Hanging Gardens, directed by Ahmed Yassine Al-Daraj, which is premiering in Venice, shares Jans' concerns, warning of “the impact on the financing and visibility of international cinema in France.” Jans says the privatization of French broadcaster France Télévisions will also deal a blow to the local and European film industry, as it is the main source of advance financing for films.

Two surprise parliamentary elections will be held less than a month before the opening of the Paris Olympics. If the Rally National maintains its lead, Macron will have to govern under a prime minister from a far-right party until his term ends in 2027. If that happens, Jordan Bardella, the 28-year-old leading candidate who won a landslide victory in the European Parliament elections with 31.5% of the vote, has already put himself forward as a possible candidate for prime minister.

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