The prospect of a politically extreme party with little or no government experience reaching power after France's parliamentary elections is worrying investors, the chief executive of Paris stock market operator Euronext said on Tuesday, APA reports citing Reuters.
The far-right National Rally (RN) party looks set to win the most votes in snap parliamentary elections coming up on June 30 and July 7 and could form France's next government, with a left-wing coalition called New Popular Front forecast to come in second.
"If a team that has never governed comes to power, there is total uncertainty, a complete unknown", Euronext CEO Stephane Boujnah told France Inter radio, adding:
"There is also a lot of concern about other things that are not economic, for example about what is happening to the unity of French society and the risks that this unity, which could be damaged, could have an impact on business."
President Emmanuel Macron's surprise call for snap elections earlier this month triggered a heavy selloff of French stocks and bonds.
France's economic model made the country vulnerable if interest rates attached to its sovereign and corporate bonds shoot up, said Boujnah, whose company also runs stockmarkets in other European hubs including Amsterdam and Milan.
"To continue to finance a system in which 58% of what we create is injected into public spending, we have to borrow heavily from the rest of the world. And we need the rest of the world to give us loans," he said.
Investors and ratings agencies have raised concern about RN's policies such as a pledge to cut value-added tax on energy from 20% to 5.5%. Standard & Poor's said this could weigh further on France's rating after it downgraded the country last month.
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