“Filer à l’anglaise” or
Will the French Leave English Style?
APRIL 2017
In the late 1700’s, the English took to calling a departure that was abrupt and
without permission a ‘French leave.’ About one century later, the French began
referring to the same sort of absence as ‘filer à l’anglaise,’ or to leave English style.
On April 23, France will conduct the first round of its presidential election, which
has become an important referendum on the nation’s attitude toward membership
in the Euro area, the common currency union. There are two precedents last year in
which voting outcomes took a surprising turn: the UK referendum on membership
in the European Union and the U.S. presidential contest. From the U.S. perspective,
Vincent Reinhart
Chief Economist
how might our experience inform understanding the upcoming French election?
Standish Mellon
Asset Management
Company, LLC
There is more than an ocean separating the U.S. and France; there is a gulf of understanding. When
we talk to investors in Continental Europe on the topic of France, the conversation tends to center
on a few constant themes—France’s commitment to the European project, their mistrust of factions
and their voting system, which is designed with multiple steps to steer the outcome to the center.
Consequentially, their advice is as follows: that the electoral prospects of French presidential
candidate Marine Le Pen and the National Front are slim, that risk spreads should not be too wide
and that portfolio hedges against a Le Pen possibility will unnecessarily lower total return. In the U.S.,
this sounds familiar to the advice offered in the first ten months of last year and then proven wrong
in the eleventh. On November 8, 2016, the U.S. surprised the world by electing Donald Trump, the
unconventional leader of a minority faction. What have we learned about expectations, elections, and
governance since then?
Expectations are harder to assess in the 21st century. Pollsters are now sampling a more opaque and
heterogeneous population than is their experience, implying that their ‘margin for error’ may be wider
than they think. People are less anchored by traditional jobs; they move more, cut themselves off
landlines and are harder to contact. For those who can be reached, there are more distractions and
less focus on the details of the issue at hand— a sense of vagueness which is at times intentional.
In our internet-savvy world, people who see that an on-line disclosure becomes fodder for trolls are
less willing to reveal anything to a stranger. This might be especially true in supporting a candidate in
disrepute among the establishment, whether named Trump or Le Pen.
Not FDIC-Insured. Not Bank-Guaranteed. May Lose Value.
The U.S. election revealed once again that the U.S. is divided by income, by race and ethnicity and by
geography. The geographic split between city and countryside is most evident in the electoral map of
the 2016 presidential-election results. States with dense urban population voted decisively for Hillary
Clinton, colored in blue on the map by tradition, while rural states lopsidedly went with Donald Trump,
colored in red. As a result, the U.S. was painted blue on both coasts and red in the center. The map,
however, also revealed what mathematicians refer to as self-similarity, or the principle that closeups to any part of the picture resembled the picture as a whole. Within a state, counties with urban
centers tended to be blue, while rural ones leaned towards red; and within a county, blue turned to red
with distance from population clusters. Rural voters—who, by the way, prove difficult for pollsters to
snare—showed themselves wary of the current establishment and desirous of change back toward a
more traditional system. Of note here, France has a slightly higher population share in rural areas than
the U.S.—20% versus 18%, respectively, according to the United Nations.
Anglo Saxon elections in 2016 channeled voter anger against people and issues. The missed
opportunity in doing so is that the will of the people reveals where they do not want to be taken, not
where they want to be led. Voters in the UK decided to leave the European Union but were silent about
subsequent arrangements. U.S. voters rejected the conventional in turning to Donald Trump, in part
because he lacked the traditional infrastructure of electioneering. His campaign was innovative in
its ability to harness new media (mostly free) and to work without a safety net of high-profile friends.
While Candidate Trump won despite this, President Trump is finding improvisation is insufficient to
staff a government or get legislation passed.
Take from this experience two worrisome lessons for the French contest.
For one, channeling anger tends the outcome to the ends of the political spectrum, raising investor
concerns about national hostility toward the Euro area and lassitude about government debt burdens.
Of note here, the interest-rate spread of French over German government debt has widened on the
increasing vote share of Marie Le Pen and Jean-Luc Melechon. This points the direction, perhaps only
tamely; to the market reaction were either to win.
For another, three of the four leading candidates lack formal surrogates already positioned in office.
Marine Le Pen heads a party that has two members in the National Assembly, and Emmanuel
Macron and Jean-Luc Melenchon describe themselves as leading movements, not parties. As with
Donald Trump now, any of the three will have to find friends in authority quickly to govern if elected.
This suggests that any enthusiasm or aversion incorporated into asset prices immediately after an
electoral surprise will wane somewhat. Over time, the understanding will creep in that change at the
top does not necessarily produce effective change in the government’s direction.
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objectives, fees, and expenses before investing.
Views expressed are those of the author stated and do not reflect views of other managers or the firm overall. Views are current as of the date of
this publication and subject to change. This information should not be construed as investment advice or recommendations for any particular
investment. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. The
Dreyfus Corporation, Standish Mellon Asset Management Company LLC (Standish) and MBSC Securities Corporation are subsidiaries of BNY Mellon.
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MARK-2017-04-21-1525 Exp. 12/2017