Macron has taken a radical gamble that could backfire
President Emmanuel Macron called snap parliamentary elections in France.
It came after a big win for rival Marine Le Pen's National Rally in the European Parliament vote.
This could dissolve Macron's coalition, risking cohabitation with an opposition prime minister.
French President Emmanuel Macron shocked the world on Sunday by calling a snap election in France.
The move came after a big win for his rival Marine Le Pen's National Rally party at the European parliamentary elections. Macron's centrist alliance secured a 14.6% vote compared to the far-right National Rally's staggering 31.4%.
The French president's defeat by hard-right nationalists had been expected. But his response hadn't.
There's now a chance Macron "would have to govern with his nemesis," Daniel Hamilton, a senior fellow at the Foreign Policy Institute of Johns Hopkins University SAIS, told CNBC.
"His gamble is to use the three years before the next presidential elections to show they did a really bad job and that somehow the voters will reward him," he said.
France's snap election
Macron said the decision to hold a snap election was "an act of confidence" and that he believed "in the capacity of the French people to make the best choice for themselves and for future generations," according to a translation by The Guardian.
"I have confidence in our democracy, in letting the sovereign people have their say. I've heard your message, your concerns, and I won't leave them unanswered," he said.
He presented it as a choice for voters: give him a mandate or risk being governed by hard-right nationalists.
Le Pen said her party was "ready to take over power if the French give us their trust in the upcoming national elections."
Investors reacted by selling off French stocks and bonds. On Monday, the country's Cac 40 stock index fell by as much as 1.8% to its lowest since February, the Financial Times noted.
There is likely more volatility ahead. The election, set to take place between June 30 and July 7, could jeopardize Macron's influence — which has steadily waned since the formation of the current coalition government in November 2021.
'This is a severe defeat for Macron'
Macron's term as France's president still runs for three more years, which means he will stay in charge of foreign policy, justice and defense.
However, the snap election could likely end the current coalition, which comprises Macron's party, Renaissance, the Democratic Movement, Horizons, En commun, and the Progressive Federation.
Macron may have to form a cohabitation government with a prime minister from an opposition party, such as the National Party or Les Republicains.
They would have a huge say over France's domestic and economic policy.
Alain Duhamel, a veteran political analyst, told the FT that this outcome is inevitable: "A dissolution means a cohabitation."
According to the FT, the decision to call a snap election was a high-stakes attempt to prevent National Rally's Marine Le Pen on her trajectory to succeed Macron as president in 2024.
But the plan could backfire if the far-right continues to dominate votes.
"This is a severe defeat for Macron given that he has been president for seven years and he has long said his goal is to combat the far right," Bruno Cautrès, an academic and pollster at Sciences Po in Paris, told FT.
Antonio Barroso, a deputy director of research at the consultancy firm Teneo, told CNBC that "the available information suggests Macron has called an election he might lose."
Representatives for President Macron did not immediately respond to a request for comment.
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