The Paris stock exchange started the week calmly after the first round of the French presidential election.

The leading index CAC 40 was initially almost unchanged in the first hours of trading and then slightly up.

Here and there, however, relief spread among investors.

The papers of the construction group Vinci were able to increase significantly by around three percent.

He operates several hundred kilometers of French motorway and has to fear that the concession contracts will be terminated if the right-wing populist Marine Le Pen wins the elections.

Niklas Zaboji

Economic correspondent in Paris

  • Follow I follow

However, the first polls for the runoff election in two weeks see the incumbent Emmanuel Macron ahead.

In addition, his encouragement in the first round was stronger than expected.

This has calmed things down a bit in the financial and economic world, after some nervousness had spread recently.

"Stock market, interest rates, debt: The Le Pen risk," was the headline of the leading trade newspaper "Les Échos" on its front page last Thursday, describing how the right-wing populist's growing poll numbers and expensive election promises unsettled many investors.

Economists rate Macron's program much more positively

"Unrest" on the financial markets are to be feared, said Grace Peters from the investment house JP Morgan.

In fact, yields on 10-year French government bonds have risen noticeably since the beginning of April.

This is a sign of growing pessimism on the stock market.

In Germany, the increase was synchronous, the same applies to the slight downward trend on the stock market in the past week.

Most economists also rate Macron's program much more positively than Le Pen's. "Macron's re-election would be a positive element for the cohesion of the European Union," says Jean-Baptiste Pethe, economist at the investment consultancy BNP Paribas Exane.

Continuing labor market reforms, raising the retirement age and cutting corporate taxes should boost medium-term growth prospects, he believes.

The economists at the liberal Montaigne Institute calculated government shortfalls of 102 billion euros for Le Pen’s election program, while “only” 44.5 billion euros for Macron.

There are noticeable differences between the two opponents for the runoff election: Macron is campaigning for raising the statutory retirement age from 62 to 65, while Le Pen even promises to return to retirement at 60 after 40 years of work;

In addition to new nuclear power plants, the incumbent also wants to expand solar and, above all, wind power at sea, while his challenger puts the energy policy focus solely on nuclear energy, promises the first new reactors as early as 2031 and wants to stop wind power projects.

Economic similarities

The differences are also great with regard to immigration and European policy: Macron wants to stick to European integration in its current form and cross-border projects such as the FCAS and MGCS armaments projects, while his challenger strikes a national note, calls for a renegotiation of European treaties and a referendum on giving preference to the French when it comes to jobs, housing and social benefits.

Nevertheless, there are some similarities in economic policy - significantly more than with the left-wing populist Jean-Luc Mélenchon.

To strengthen the purchasing power of employees, Macron and Le Pen promise partly similar recipes: Macron wants to increase the tax- and social security-free special bonus that companies can pay their employees from 1,000 to 3,000 euros, while Le Pen promises companies a 10 percent wage increase to waive the social security contributions.

Both also want to lower the production tax for companies and thus secure the favor of the economy;

since it is raised independently of the profit and is still high in international comparison despite the reduction in Macron's first term in office, business associations have been pushing for it for some time.

The opponents are also united by increasing the French defense budget, massively promoting hydrogen technology with state funds in addition to nuclear power and relocating industry with subsidies.

This consonance on economic policy points should explain why the French employers' association Medef has so far not taken a clear position in the election campaign - in contrast to five years ago, when there were warnings about Le Pen's exit from the euro, which was still being demanded at the time, feared unrest and the Return to retirement at 60 criticized as too expensive.

"Apart from the extreme left, no one is really anti-corporate anymore," Medef President Geoffroy Roux de Bézieux recently told Le Figaro newspaper.

Companies have "almost become a national thing" and there is a large consensus of positions on certain issues of reindustrialization.

In a meeting this Monday afternoon, they want to clarify whether the employer representatives will still show their colors for the run-off election.