Emmanuel Macron has air-conditioned the stadium. The expression used when a football player scores a decisive goal in front of a crowd that is all for the opposing team applies quite well to the effects of the dissolution of the National Assembly on the course of business in France… Once the surprise, incomprehension and anger have passed, what attitude should we adopt when there is growing concern about the country’s conduct, its economic policy, its taxation and its institutional mechanisms?
The most visible barometer, investor behavior was immediately scrutinized. The CAC 40 index quickly lost all the advance gained since the beginning of the year, and has not really recovered since, despite a rebound after the first round. The interest rate gap between France and Germany has worsened, a sign of creditors’ distrust of French debt. But don’t panic either. “We are not seeing any sell off [NDLR : ventes massives] investors. Their mindset is more that if the market were to be volatile, it would be a buying opportunity, says Vincent Marioni, director of credit investments at Allianz Global Investors. Americans are more focused on what is happening at home. Seen from the United States, France is a small country.”
“We raise the pencil”
Which does not prevent these international asset managers from fishing for information to make the right decisions. “Since the downgrade of France’s rating by S&P and then the announcement of the dissolution, I have never been so in demand in such a short time,” says a surprised economist who worked in ministries in another life. “My foreign interlocutors are looking for a more detailed understanding of the French political landscape. They ask me about the domestic energy market, the potential nationalization of highways, etc.”
In the mergers and acquisitions department, questions are also being asked and delays are being taken. “The artificially maintained fear of Jean-Luc Mélenchon coming to power has been replaced by relief that it is the RN that is emerging: this has eased anxiety, notes a local banker. Seen from elsewhere, Jordan Bardella’s party appears to be a lesser evil. After all, France is being hit by populism like other European countries before it: the Netherlands, Italy, etc.” While waiting to see how the wind will turn, “we are holding our pencils up,” acknowledges this financier, adding facetiously: “the only one who, on the contrary, is accelerating the movement is Vincent Bolloré. [NDLR : l’introduction en Bourse de Havas a été annoncée entre fin 2024 et début 2025 par Yannick Bolloré dans Le Figaro]. A sign of confidence in the years to come? “. The leaders of the large groups are rather seeking reassurance, believing that a government tempted by adventurous measures would not have the means to act as it pleases. That Europe will be there to limit the damage. That the markets, ultimately, will serve as safeguards.
Low morale in the trade
Among SME bosses, the mood is getting more oppressive. According to data from the Fiducial expert firm, the level of optimism among small entrepreneurs regarding the general business climate fell by 8 points in June, to 24%. Paradoxically, their feelings about their own business are improving. When clouds gather over the country, we put our personal situation into perspective, they justify at Fiducial. But if we look in detail, the morale of small business bosses is collapsing, down 19 points compared to the first quarter.
In the fashion sector in particular, recent political events are reinforcing already unfavourable trends. “Consumption was not well oriented, down 2% over the first five months according to the IFM Panel, which is based on the figures provided by distributors”, notes Gildas Minvielle, director of the Economic Observatory of the French Fashion Institute. Retailers suffered from the cold in April, the rain in May… The June elections are the final blow. “Generally speaking, the time devoted to elections is not favourable to consumption: at the moment, we are served”, sighs the economist.
Real estate on hold
The same observation is made in real estate, where the market’s timid recovery is once again marking time. “International customers have completely paused,” notes Yann Jéhanno, president of the Laforêt network. “On the evening of the dissolution, a Swiss buyer who was about to sign a compromise for two apartments in Paris, one for her and one for her mother, called us to say that she was putting everything on hold.” As for the French clientele, there are those already committed, whom real estate agents are trying as best they can to reassure. And those in the prospecting phase, who consider it urgent to wait to see what the future government will propose in terms of taxation or regulation. Because in real estate, for once, thunderous announcements have multiplied.
The presidential majority promises to eliminate notary fees on transactions under 250,000 euros for first-time buyers. The National Rally is talking about repealing the bans on sales or rentals linked to the energy performance diagnosis. As for the New Popular Front, it wants to ban rental evictions for non-payment if they are not accompanied by a rehousing proposal. Owners and tenants, current or future, no one knows which way to turn. “Housing has been the great absentee from public debate for years. Now, suddenly, everyone is coming up with their own divisive measure,” continues Yann Jéhanno. In such a context, there is little chance that the market will take off again before September, at best.”
Hiring hits a snag
Employers have also eased off the pedal. Apart from a stagnation in March, “the trend in hiring plans since the start of the year has been positive”, notes David Beaurepaire, deputy director of the Hellowork recruitment platform, the leading private player in France. June marks a break, with a volume of offers down 5.5% compared to June 2023. “A difference of 50,000 ads is not insignificant”, he notes, specifying that in the last week of the month, the drop is even more pronounced, at -12%. It is fixed-term contracts, and to a lesser extent temporary work, contracts often used as adjustment variables, which are the most affected by this cooling. “As for candidates, those who are in position prefer to postpone their intentions to apply elsewhere, adds David Beaurepaire. Everyone is in the fog.” And there is no guarantee that Sunday evening’s results will shed more light on the situation.
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