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The headlines in France on Monday after a snap election, La claque, the slap, it's crazy and now what do we do? French voters shocked the world on Sunday by rejecting Marine Lapin's efforts to see her far right National Front party take control of France's parliament. The party's leader, Jordan Bardella, said the result deprived the French of policies that would fix the country.
So soir c ericto jette lacrance don madlos.
Instead, it was the far left that came out on top in the second and final round of a snap election. That coalition's leader, Jean Luke Melanchon, said the French had voted with their conscience and rejected the worst case scenario.
Not at not for Purple Clema.
This is tricky for French President Emmanuel Macron, whose Renaissance Party came in second. Macron has asked the current Prime Minister, gabrielll la Tal to stay on for now instead of resigning. Melanchon has demanded that a left winger should replace him. The president DUIs Chantline he had met Rousset defect Santante Dora.
According to Lionel Laurent, a columnist for Bloomberg Opinion, France now faces a level of political division that is virtually unprecedented in the history of the Fifth Republic.
It was a big shock. It was a big shock for the French media. This is not the international media getting it wrong. This was a big shock. I mean, it really is a big moment.
Lionelle says it could be weeks before we see any sort of coalition government, which means Europe's second largest economy now faces a world of unknowns.
There is a rejection and repudiation of million penn So clearly the Republican front worked, but no one quite knows what the French ship voted for. So that's the big question mark.
The surprise and the disorder in France stands in stark contrast with what's playing out across the channel in the UK Parliament or return on Tuesday with a new Prime Minister, Kir Starmer and a new party in charge after fourteen years of Conservative leadership.
You campaign for it, you vought for it, you've voted for it, and now it has arrived. Change begins now.
I'm David Gerra and this is the big take from Bloomberg News Today on the show, the impact of the elections in France and the UK and the significance of a turn leftward, what it means for markets, geo politics, and the global economy. President Emmanuel Macron's surprise decision to call a snap election didn't result in as dire a situation as had been predicted, but it didn't result in a clear outcome either. According to Bloomberg opinion columnist Lionel Laurent.
So, the final count is in first place, we have the left wing Popular Front block. They got a one hundred and eighty two seats. Bear in mind the golden magic number is two to eight nine for an absolute majority in the French Parliament. And Lepenn's far right group, which was tipped to really come in top, will become the biggest group, is in third place with only one four three seats. That was the big shock. And then in the middle second place, Emmanuel McCall's centrist block has
done better than expected. So the messages nobody has an absolute majority, Leonel.
President Macron's decision to call for a snap election was characterized as a gamble. Did that game pay off.
So it did and it didn't. Basically, what has paid off is that clearly the Republican Front, this willingness to choose the voters, to choose the lesser of two evils when it comes to keeping Marine le Penn out of power has worked. Matcorn has, let's say, saved his centrist movement. That said, though it was clearly driven by tactical voting, there was a lot of dependency on the left to help save Macau's movement, and he as a character, as
a leader is clearly weakened. I mean, his Centrist block initially had an absolute majority, but that's been withering over the years and it's lost loads of seats. So clearly, whoever leads the Centrist block in the future, it's not going to be Macon and they've i think won some time to choose a new leader and to bounce back from this. So I would say it's half paid off.
What change between the first round of voting and the second. It came out of the first round of the far right had this very sizable, solid lead. What happened between then and the second vote.
So just to get through the tactical part, So essentially in several hundred districts. The left wing block and Mackhorn's block essentially agreed to respectively pull out their own candidate to not split the vote. It's not a rare thing in France. It's not a rare thing in many countries
to have people simply pull out of a race. But the amount of districts where that took place, well over two hundred, did, I think create a situation where we're wondering will voters actually turn out to vote because these parties are so different. You'll really be holding your nose to a great degree, so will people get up off the couch. The other thing is that the French, this two round system really shows its worth in situations like this. The first round vote, you vote with your heart, you
express anger, the message is sent. But the French basically opened the door and peered into whatever you want to call it, the abyss, the pit of the sarlac. They took a look at what the reality of a La penn Win would be and they said no.
Last time you and I spoke a few weeks back, you told me that this decision to call a snap election was one that was born out of frustration with government dysfunction. It strikes me when you look at the political landscape now in France that dysfunction really hasn't gone away.
Yes, I think we just have to accept that a new chapter is opening and it is not a peaceful one where we've closed the door on La Pen and opened the door on some concord at that's stable and long lasting. The first task is to actually build the coalition. There is some hard work. It'll take time to build
that government. And then a few months down the line, having tried to find some kind of common policies that people can agree on, which will frankly be very modest, maybe some tax increases, maybe some kind of watering down in Micael's reforms, it'll come time to do a budget and that is going to be tough. That's going to be where the cookie crumbles. So we are entering a very volatile and fractious period to French politics. And don't
forget that the pen has not gone away. She will have time now to become more competent and get ready to govern and crucially constantly attack from the opposition benches mac Horn and the parties that I'm sure she will castigate as the elite who are stealing the votes of the true French. So it's going to get ugly. But I do think there is some value in having delayed or deferred whatever La penn has in store for the French.
As we look ahead to the coming weeks, the coming months, if we get the kind of paralysis and dysfunction that you and I have been talking about, what are the consequences going to be for the country.
Look, no one's expecting fireworks. France has deep seated issues. It has a very high debt load, it has an economy that's growing below the euro Area average, it's in demographic decline, it has a productivity lag and innovation lag with the US, and it clearly has a European leadership role that is at risk. So all of these issues are not going to be solved by a kind of coalition government that's cobbled together from one day to the next.
That's not going to happen. But in terms of the kind of management of the day to day, what can we imagine there are going to be some pretty tough discussions with Europe because that is the constraint. Financial markets are not going to give France much room for maneuver there will be a constant testing with European partners and
with markets as to what this government can do. So frankly, I'm not expecting huge, ambitious policies and it may simply be a question of how much extra can the government spend to deliver some of the purchasing power gains that voters want without causing a financial crisis.
After the break, we head across the Channel to unpack election results in the United Kingdom and we look at what France's gridlock and Britain shift left mean for Europe and for the rest of the world. While the left's victory in France came as a shock, in the UK, the left leaning Labor Party was projected to prevail in the most recent elections, and that's exactly what happened. It was a big win for a party that suffered a devastating defeat by the Conservatives under Boris Johnson just five
years ago. The UK Parliament is sitting Tuesday and the new Labor leader, kir Starmer has already started outlining his party's plans.
Today we start the next chapter, begin the work of change, submission of national renewal and start to rebuild our country.
To dig into the results and what they mean for the UK. I sat down with Stephanie Flanders, who runs economics and government coverage at Bloomberg. She's also a co host of the Bloomberg podcast Voter Noamics. I began by asking her to break down the results of the vote on July fourth.
First and foremost, it was just a massive kicking for the Conservative Party, the biggest loss of seats of any prime minister, in fact, of any party in history in a UK election. Two hundred and fifty members of Parliament lost their jobs, often in seats where they thought they probably would have thought they'd be in there for life. And I think, just to sort of crystallize it, fourteen million people voted for Boris Johnson's Conservative Party. Barely five
years ago this election, that number was just seven million. Now, Labour did very well out of that. It actually got more than four hundred seats, nearly two thirds of the seats. But it's interesting to note that it really only got a third of the vote's cast and actually got not that many more votes than in the last election. You have a system with two main parties that have national coverage. If one loses big the other wins big, even if
it's with a relatively small proportion of votes. And in the end, what matters to us to the world is that Keirs Stalmer's Prime Minister with an impregnable majority and we shouldn't expect that to change for five years.
Should we insure with this as a leftward shift or is this more just a rebuke of Boris Johnson? Is it a swing left as you see.
In You know, I think the exceptional thing about the last fourteen years of Conservative government is that they have all felt like very different governments. You know, we had five prime ministers, almost as many economic policies, business taxes went down and then up, then down, then up. We were in the European Union at the start of that period,
and then out. So I would say it's a move to the left, very sort of slight moved to the left at a time when many other countries in Europe and potentially the US as well, have often been turning right. This government's going to be a bit more oriented towards investing in public services and a bit more tolerant of increasing taxes at the margin. But the woman we have coming in to be the first female Chancellor of the Exchequer Treasury Secretary, used to work at the Bank of England.
She's pretty orthodox in her approach. Rachel Reeves, I think the big change, more than anything else, will be not the lurch to the left, but stability. You know, a vote for a new party was in this case a vote for stability after quite a lot of psychodrama and upheaval.
As we move from conservative leadership to labor leadership, what does that mean for the country as a whole.
You're moving to a sort of traditional kind of labor leader. Keir Starmer's sort of straight talking lawyer is not spend a lifetime in politics. In fact, he only came into Parliament about ten years ago. Less than that, in his early fifties he was a lawyer. He'd run the Crown Prosecution Service. So that's a bit like being the kind of chief US Attorney. And there is no such thing as Starmerism. It's not like his predecessor Jeremy Corbyn, whom
many people will remember. He wants to just get stuff done, or at least that's what he's put across to people.
Stephanie, could you give us the lay of the land and describe the many challenges this new labor government inherits. What's the party's focus going to be on day one?
The focus has been throughout their campaign, and I think most economists would say it's been in the right place. Has been on growth, on the need to get Britain's growth rate back up. If we had grown our same at the long term average rate since two thousand and eight, our economy would be forty percent bigger. That's how much
we fall and short. And it's true that lots of countries have struggled after the global financial crisis, but by and large we have done worse than many, and particularly on a kind of per head basis in terms of living standards. Our investment is among the lowest in the G seven consistently, and yet partly as a result of the lower growth and the pressures on population and on
the aging society. Taxes are actually the highest they've been in seventy years, and you know, money's extremely tight, so he's going to have to try and square that circle whilst avoiding a big squeeze on public service spending, which is otherwise coming down the track. And again that all comes down to getting faster growth and higher investment crucially.
So we're focused on these two major parties. But we did say one surprising result, the far right Reform Party got fourteen percent of the vote. The party's leader, Nigel Faraj, pretty divisive figure in British politics. What should we take away from that.
Well, it's certainly true that Nigel Ferrage, this very controversial figure, gets on quite well with Donald Trump, who'd originally said he was going to not be a big part of this election because he was more focused on the US. He wanted to go and hang out in Mara Lago.
He decided once the election was called to take over the party that he has helped to create, Reform UK and has attracted an enormous amount of support explicitly from disgruntled Conservative particularly the sort of anti immigrant side, anti
European side of the Conservative Party. So how the rump Conservative Party decides to deal with him, deal with that party, what lessons they draw ideologically from this is going to be a big challenge for the Conservatives, although I should say, you know, the interesting thing is we don't have to care about the Conservatives for quite a long time and their internal struggles, but it will certainly be interesting to watch what happens to the right of the UK, who
are now out of power. Given this rise of nigerl Ferrage.
It's tempting to see the outcome of both the French and the British elections as a rejection of extremism. As President Joe Biden suggested in an interview with MSNBC on Monday, Pras rejected extremism.
Democrats were rejected.
Here as well, But that might not be the best takeaway. Nearly half of the world's population lives in countries holding elections this year, and Stephanie and Lionelle say that the results could serve as a wake up call of a different sort for politicians running for reelection.
The overriding lesson that I see from looking at all of these elections through this year is an anti incumbency feeling in most places that are truly democratic. Obviously Russia we've had very strong result for President Putin, but where you have a vibrant and functioning democracy, voters have mostly punished incumbents. You know, even in India, where Prime Minister Modi was returned much less emphatically than expected. We saw
that with Milay in Argentina. I think the other way in which we're definitely in line with others, is a vote against inflation.
We have had an inflation shock in a lot of countries, and that can really blow up a leader's record, which seems otherwise great on paper when you look at the jobless rate, when you look at economic growth, but when people feel their real wages get squeezed, whether it's in the US, whether it's in France, whether it's in the UK, that really can change people's lives and it can change
the way people vote. And so I think that even though we are exiting I guess the inflation shock, I do think that there is a question that everyone needs to ask, which is have we really learned the lessons from this inflation shock? We sure we understand it? And are we sure we know how to fight the next one when it comes along.
Voters are looking at the cost of food, cost of energy, cost of rent, other basics. They don't like it, and they're punishing governments for it.
This is the big take from Bloomberg News. I'm David Gura. Make sure to check out the latest voter Nomics podcast on the French election featuring Jean Claude Trichet, the former president of the European Central Bank. This episode was produced by Julia Press and Jessica Beck. It was edited by Aaron Edwards and Stacy Vanick Smith and fact check by Adriana Tapia, Rff, Jalasho Perry, and Thomas lou It was mixed by Robert Williams. Special thanks to Julia Manns and
Keith Coe. Our senior producers are Kim Giittleson and Naomi Shaven, and our senior editor is Elizabeth Ponso. Nicole Beemster bor is. Our executive producer Sage Bauman is Bloomberg's head of podcasts. Thanks so much for listening. Please follow and review The Big Take wherever you get your podcasts. It helps new listeners find the show. We'll be back tomorrow.