France’s allies relieved by Le Pen loss but wonder what’s next

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German Chancellor Olaf Scholz and Spain's Prime Minister Pedro Sanchez are seen chatting during the UEFA Euro 2024 quarter-final football match between Spain and Germany at the Stuttgart Arena in Stuttgart on July 5, 2024. With the French far-right thwarted from taking power after in France's election, the two EU leaders can now rest easy. (AFP photo)
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Social Democratic Party (SPD) foreign policy spokesman in the German parliament Nils Schmid. (AFP/File)
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Updated 08 July 2024
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France’s allies relieved by Le Pen loss but wonder what’s next

  • National Rally’s defeat signals at least a temporary pushback against a far-right surge in Europe, says Poland's Donald Tusk
  • Germany's ruling Social Democrats are glad “the worst has been avoided” but worry that Macros is weakened

LONDON/BRUSSELS: Many of France’s allies breathed a sigh of relief that the worst was averted as Marine Le Pen’s far-right failed to win a snap election on Sunday but they noted that a messy coalition from a hung parliament could also pose headaches for Europe.

Le Pen’s National Rally (RN) had been favorite to top the polls, raising the risk of France’s first far-right government since World War Two and threatening to upend economic and foreign policy in the euro zone’s second-largest economy.

In particular, Ukraine’s allies feared a Le Pen-led government could be soft on Moscow and pare back military aid that Kyiv has relied on since the Russian invasion in 2022, though her party has latterly said Russia was a threat.

The National Rally’s defeat signals at least a temporary pushback against a far-right surge in Europe, but could herald a period of instability with a new government in an uneasy “cohabitation” with President Emmanuel Macron. “In Paris enthusiasm, in Moscow disappointment, in Kyiv relief. Enough to be happy in Warsaw,” Polish Prime Minister Donald Tusk said on X.

Macron had called the snap poll in an attempt to wrest the initiative back from Le Pen but his own party was left trailing behind an alliance of leftist parties that performed far better than expected to take first place. Several early reactions from overseas rejoiced that the immediate threat of a far-right government had been averted.

‘Worst has been avoided’

“The worst has been avoided,” said Nils Schmid, the foreign policy spokesperson for Chancellor Olaf Scholz’s Social Democrats in Germany, where the far-right has also surged in popularity during a cost of living crisis.

“The president is politically weakened, even if he retains a central role in view of the unclear majority situation. Forming a government will be complicated,” Schmid told the Funke media group.

Forming a government will be “tricky” and parties must show “flexibility” and an “ability to compromise,” said Schmid, whose country has long been used to drawn-out negotiations leading to seemingly unwieldy coalitions.

Scholz’s government is made up of his SPD, the Greens and the liberal FDP. But French politics is unaccustomed to such arrangements.

“The crisis isn’t over, quite the opposite,” said Germany’s conservative FAZ daily.

“France, and with it Europe, are heading for an unstable period” with the prospect of “fragile government coalitions depending on the extremes and liable to fall at any moment,” it added.

‘Rejection of the far right’
Spanish Prime Minister Pedro Sanchez on Sunday hailed France’s “rejection of the far right” after a left-wing coalition was projected to form the largest group in parliament in snap legislative elections.

France opted for a “rejection of the far right” and “a social left that tackles the people’s problems with serious and brave policies,” the socialist premier wrote on X, formerly Twitter.

Sanchez welcomed the shock result alongside this week’s UK general election where the center-left Labour party achieved a landslide victory over the Conservatives.

He said both countries “have said YES to progress and social progress and NO to going back on rights and freedoms. You don’t make deals or govern with the far right.”

No single group won an absolute majority in the second round of France’s legislative elections on Sunday, but the estimated results were disappointing for the far-right National Rally, which won the first round on June 30.

President Emmanuel Macron’s centrist alliance will have dozens fewer members of parliament, but held up better than expected.

‘Huge relief’

Nikos Androulakis, the head of Greece’s Socialist PASOK party, said the French people had “raised a wall against the far right, racism and intolerance and guarded the timeless principles of the French Republic: Liberty, Equality and Fraternity.”

Colombia’s leftist firebrand President, Gustavo Petro, also congratulated the French for keeping out Le Pen. “There are battles that last just a few days but (which) define humanity’s fate. France has gone through one of these,” he said.

An EU official, speaking on condition of anonymity, called it a “huge relief” but added: “what it means for Europe on a day to day basis remains to be seen though.”

Deep divisions

The election left the French parliament split between three large groups — the left, the centrists, and the far right — with different platforms and no tradition of working together.

The left wants to cap prices of essential goods like fuel and food, raise the minimum wage and the salaries of public sector workers, at a time when France’s budget deficit is already at 5.5 percent of output, higher than EU rules permit.

“Bye-bye European deficit limits! (The government) will crash in no time. Poor France. It can console itself with (Kylian) Mbappé,” said Claudio Borghi, senator from Italy’s right-wing League party, referring to the French soccer star.

Other hard-right politicians expressed frustration. Andre Ventura, leader of Portugal’s far-right party Chega, called the result a “disaster for the economy, tragedy for immigration and bad for the fight against corruption.”

A note by Capital Economics said France may have avoided the “worst possible outcomes” for investors, of an outright majority for either Le Pen or the leftists.

A fractious parliament means however it will be difficult for any government to pass the budget cuts that are necessary for France to comply with the EU’s budget rules, it said.

“Meanwhile, the chance of France’s government (and the governments of other countries) clashing with the EU over fiscal policy has increased now that the bloc’s budget rules have been re-introduced,” it said.

 


Philippines signs free trade pact with UAE

Updated 58 min 42 sec ago
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Philippines signs free trade pact with UAE

  • UAE deal is Philippines’ fourth free trade pact, after South Korea, Japan, and EFTA
  • Business body warns of uneven gains if domestic safeguard mechanisms insufficient

MANILLA: The Philippines signed on Tuesday a comprehensive economic partnership agreement with the UAE, its first such deal with a Middle Eastern nation.

The Philippines and the UAE first agreed to explore a free trade pact in February 2022 and formalized the process with terms of reference in late 2023. Negotiations started in May 2024 and were finalized in 2025.

The CEPA signing was witnessed by President Ferdinand R. Marcos Jr. who led the Philippine delegation to Abu Dhabi.

“The CEPA is the Philippines’ first free trade pact with a Middle Eastern country, marking a milestone in expanding the nation’s global trade footprint,” Marcos’s office said.

“The agreement aims to reduce tariffs, enhance market access for goods and services, increase investment flows, and create new opportunities for Filipino professionals and service providers in the UAE.”

The UAE is home to some 700,000 Filipinos, the second-largest Filipino diaspora after Saudi Arabia.

With bilateral trade worth about $1.8 billion, it is also a key trading partner of the Philippines in the Middle East, and accounted for almost 39 percent of Philippine exports to the region in 2024.

The Philippine Department of Trade and Industry earlier estimated it would lead to at least 90 percent liberalization in tariffs and give the Philippines wider access to the GCC region.

“Preliminary studies indicate the CEPA could boost Philippine exports to the UAE by 9.13 percent, generate consumer savings, and strengthen overall trade linkages with the Gulf region,” Marcos’s office said.

The Philippine Chamber of Commerce and Industry-Makati expects the pact to bring stronger trade flows, capital and technology for renewable energy, infrastructure, food, and water security projects as long as domestic policy supports it.

“CEPA can serve as a trade accelerator and investment catalyst for the Philippines,” Nunnatus Cortez, the chamber’s chairman, told Arab News.

The pact could result in “expanding exports, attracting capital, diversifying economic partners, upgrading industries, and supporting long-term growth — provided the country actively supports exporters and converts provisions into concrete commercial outcomes,” said Cortez.

“The main downside risk of CEPA lies in domestic readiness. Without strong industrial policy, MSME (Micro, Small and Medium Enterprises) support, safeguard mechanisms, and export development, CEPA could lead to import dominance, uneven gains, fiscal pressure, and limited structural transformation.”

The deal with the UAE is the Philippines’ fourth bilateral free trade pact, following agreements with South Korea, Japan, and the European Free Trade Association, which comprises Iceland, Liechtenstein, Norway, and Switzerland.