By Marcus Turner Jones
Emmanual Macron sealed a decisive victory in the final round of the French presidential elections, seeing off opposition from far right candidate Marine Le Pen to become the youngest president of France in history, at age 39.
Macron is a former investment banker who is pro-EU and pro-global. He has promised things like an end to the controversial state of emergency that was enforced after the Paris bombings, and is keen to preserve and strengthen ties with the EU. Le Pen, on the other hand, was planning to follow Britain in having a referendum on leaving the EU, however unlike the leadership in Britain at the time of the referendum, she would be doing it from a staunchly ‘leave’ stance. She also planned to severely restrict immigration, even removing French citizenship from people with dual nationality.
Macron’s win was the result that had been long predicted in the polls, however there was a lot of concern from political analysts around the world that the polls might be misleading – given that polls had also predicted decisive wins for Hilary Clinton in last year’s presidential election, and that Britain would not vote in favor of leaving the EU in the Brexit referendum.
For many, the French presidential election was seen as a gauge of just how far reaching and strong the more populist movement in politics that lead to Brexit and the Trump presidency was. The fact that Le Pen lost the election indicates that the movement to the right seen in Britain and the U.S. is not as strong in France, but the fact that she made it further and secured more votes than the National Front ever have in France before shows that France is not without its more anti-immigration, nationalist sentiment.
Middle East Trade with France and the EU
Countries in the Middle East have a strong investment in France, with 380 Middle Eastern companies in operation there, employing around 24,000 people. Middle East investors also play a strong part in France, with 2016 seeing the UAE as the biggest investor, providing for 34 percent of Middle Eastern financial involvement in the French market, followed by Qatar and Lebanon with 18 percent each. The majority of investment at 36 percent targeted the Ile de France region of Paris, one of the major business hubs in Europe. Middle Eastern investment touches on a huge range of industries in France, including technology, hospitality, transport and agriculture.
Under Macron, none of this looks set to change, and with France’s position within the EU now secured and set to strengthen, much of the uncertainty around investing in France has been removed, meaning Middle Eastern investors will now find it a less risky prospect than a France that may have withdrawn from the EU and taken back the franc as currency had LePen won.
Macron is also keen to entice businesses, especially in the financial services sector, to relocate to Paris from London following Brexit. This could be an interesting area to watch for investors should he be able to create good incentives for Paris to become Europe’s new key financial centre.
Ultimately, with Macron’s win, there should be little for those in the Middle East with interests in France to worry about, and trade should continue as before. Increased stability in the euro may lead to a drop in gold price as the drive for safe havens may be reduced somewhat without the threat of France leaving the EU. However, with ongoing uncertainty in the U.K. and U.S., the effect of the French election on this may be minimal.
In short, aside from currency and commodity price fluctuations which investors may want to watch, the new French presidency should be an encouraging result for the Middle East.