Favorites Win First Round of French Presidential Election
Advance to Last Round May 7
April 24, 2017
As we expected, Emmanuel Macron and Marine Le Pen emerged as winners in France’s first round of
presidential elections. Out of 11 candidates, Mr. Macron received the most votes at 24%, and Ms. Le Pen came
in second with 21%, both advancing to the next and final round on Sunday May 7. Defeated rival candidates,
republican Francois Fillon and communist Jean-Luc Melenchon each garnered about 20% of the electorate.
Mr. Fillon, the lead candidate before his campaign was beset by scandal-ridden headlines, has already
announced support for Mr. Macron. Less popular socialist party candidate, Benoit Hamon, also said he would
ask his voter base to rally behind Macron. Mr. Melenchon endorsed neither Macron nor Le Pen.
Spectrum continues to believe that the globalist and pro-European policies of Mr. Macron will be enough to
convince most voters to elect him as president of France. And, we agree with the polls that far-right, eurosceptic Ms. Le Pen should be soundly defeated. Even if Ms. Le Pen were to defy the odds and become
president, she would find it difficult to pass populist (anti-euro) legislation given her Front National’s nearnonexistent representation in the National Assembly and the Senate, which are dominated by center-left
(socialist) and center-right (republican) members. Mr. Macron’s En Marche party also has no parliamentary
representation but, unlike Ms. Le Pen, he has more in common with France’s socialists and republicans, as well
as the EU. It is nonetheless unclear what support he will receive following parliament’s lower house elections
in June through another two-round system of voting.
This year’s election represents the first time in 60 years that the top two candidates in France are from outside
the traditional left-right mainstream parties. Then again, nothing seems traditional these days given last year’s
winning Brexit referendum and the surprise presidential election of novice Mr. Trump in the U.S., as well as
the near election of extremist governments in Austria and the Netherlands.
The likely election of Emmanuel Macron as president bodes well for France, Europe and the developed
world. Spectrum has a stable outlook on French financials.
Joe Urciuoli
Executive Director
Spectrum Asset Management, Inc. is a leading manager of institutional and retail preferred securities portfolios. A member of the Principal Financial Group®
since 2001, Spectrum manages portfolios for an international universe of corporate, insurance and endowment clients; mutual funds distributed by Principal
Funds Distributor, Inc.; and preferred securities separately managed account solutions distributed by Principal Global Investors, Inc.
A member of the Principal Financial Group®