(Bloomberg) — France’s political turmoil is causing concern in some European Union capitals that initiatives like joint military spending and a fresh push to support Ukraine could fall by the wayside.
Doubts are growing over beefing up EU defense outlays through collective financing — an idea that President Emmanuel Macron backs strongly, according to people familiar with the matter. There’s also a fear that the snap legislative elections he called this month will undermine his role as one of Kyiv’s top cheerleaders, including his plan to dispatch army trainers to Ukraine.
Ever since he celebrated his first election victory in 2017 with the European anthem, Beethoven’s ‘Ode to Joy,’ Macron has been among the leading advocates for a stronger, more unified EU. But he’s also struggled to bring both other leaders and voters along with him, and in a landmark speech earlier this year, he warned that the European project itself is at risk.
At home, his party and its allies are now some distance behind both far-right and left-wing rivals in polls. If Marine Le Pen’s National Rally can extend its lead to cement a majority, it would pose a fundamental challenge to EU leaders, who are meeting Monday in Brussels to discuss how to stiffen their response to Russian aggression.
The president is the head of the military in France but the state budget is presented by the government, run by the prime minister and approved by parliament, which could end up with its lower house being dominated by parties with very different priorities following the two rounds of voting set for June 30 and July 7.
Macron’s gamble leaves a question mark over additional EU defense spending, for which he’d sought options for leaders to assess at next week’s summit, a person familiar with the matter said. Those options are likely to come from the European Commission, the EU’s executive arm, in the coming days, according to another person, who said joint borrowing is still being discussed and may be omitted given strong resistance from frugal nations and the fact France’s position is now weaker.
Everyone is looking at France and considering the potential impact on EU policies, another person said. All asked not to be identified talking about private discussions.
France’s own financing is a concern, too. While it adopted a military-spending bill last year that runs from 2024 to 2030, some defense-equipment pledges made since remain unfunded. Questions could also arise over Macron’s promise to provide Ukraine with as much as €3 billion ($3.2 billion) in aid this year, depending on the election results, people familiar with the matter said.
Concern about political volatility spurred a flight to haven assets last week, wiping out $258 billion from the market capitalization of the country’s stocks. On Monday, traders initially seized on Le Pen’s comments that she won’t try to push Macron out if her National Rally party wins as expected, but sentiment remains fragile before the first round of voting on June 30.
Le Pen may adopt a conciliatory approach, for now, to present herself “as a credible alternative for the 2027 presidential election,” according to Gilles Ivaldi, a political scientist at Sciences Po’s CEVIPOF Ivaldi.
But a National Rally prime minister “would have totally antagonistic positions from Emmanuel Macron on European issues, Russia, Ukraine, European defense but also climate change,” he said. “Given France’s role in Europe, it would be a weakening of Europe.”
Uncertainty will persist in the meantime, for instance over another Macron pledge to supply Ukraine with French fighter jets. That promise was made aside President Volodymyr Zelenskiy in Paris just two days before Macron dissolved parliament, but the exact number of Mirage 2000-5 planes that France will send remains unclear. Talks with countries that own such aircraft are ongoing, according to people familiar with the matter.
Adding to Macron’s complications, a group of left-wing parties is firmly in second place ahead of the first round of voting on June 30. The New Popular Front called for unity in its first campaign rally Monday evening.
The bloc, which includes Socialists, Communists, Greens and the far-left France Unbowed, was polling at 26.3% as of Monday, according to Bloomberg’s poll of polls. Le Pen’s National Rally was at 32.7%.
With significant differences on multiple issues, the New Popular Front alliance remains fragile, and is keen to avoid fragmenting the left-wing vote by public infighting. “Together, let’s make a pledge to never abandon each other,” Olivier Faure, the head of the Socialist party, told a cheering crowd Monday night.
–With assistance from Natalia Drozdiak, Aaron Eglitis and Milda Seputyte.
(Updates with markets in the 10th paragraph.)
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