‘Real victory will be in 5 years,’ Macron camp says

President Emmanuel Macron‘s government on Monday promised to reshape France’s political landscape as final results showed he had won the commanding parliamentary majority he wanted to push through far-reaching pro-growth reforms.

Macron‘s centrist Republic on the Move (LREM) party and its centre-right Modem ally won 350 out of 577 seats in the lower house, after a record low turnout for a parliamentary ballot in the postwar Fifth Republic.

Government spokesman Christophe Castaner said the high abstention rate – more than 50 per cent of voters stayed at home – was a failure for the political class and highlighted the need to change politics in France.

“The real victory wasn’t last night, it will be in five years’ time when we have really changed things,” Castaner told RTL radio.

Though lower than forecast by pollsters, Macron‘s majority swept aside France’s main traditional parties, humiliating the Socialist and conservative The Republicans party that had alternated in power for decades.

“Victory for the Centre” read the headline of the left-leaning Liberation newspaper. Financial paper Les Echos’ banner read “The Successful Gamble”.

Castaner said Prime Minister Edouard Philippe and his government would resign later in the day and a new cabinet be formed in coming days. He said he believed Philippe would be reappointed premier.

Investors welcomed Macron‘s win, with the gap between French and German bond yields holding near its tightest level in seven months.

“After the reforms, which we expect Macron to implement, France could turn into the strongest of all major economies in Europe in the next decade, outclassing a Germany that is resting on its laurels and a UK that (through Brexit) is impairing its long-term growth prospects,” said Holger Schmieding, chief economist at German bank Berenberg.

BUDGET CONSTRAINTS

Macron wants to move quickly on relaxing labour regulations before overhauling France’s unwieldy pension system next year.

During the presidential campaign he also promised to cut corporate tax to 25 per cent from 33 per cent and make a 50 billion public investment in energy, vocational training and transport infrastructure.

But he will need to be mindful of the country’s budget deficit, which the Bank of France forecasts will once again breach the EU cap of 3 per cent of national income this year.

“It is in France’s interests, its political credibility, its economic credibility, to conform with its obligations,” Pierre Moscovici, the EU’s French commissioner for economic and financial affairs told TV channel Public Senat.

Sunday’s high abstention rate means Macron will also have to tread carefully with reforms in a country with muscular trade unions and a history of street protests that have forced many a government to dilute new legislation.

But with his twin victories in last month’s presidential election and Sunday’s parliamentary vote, he has routed the old political class.

France’s youngest leader since Napoleon and having never before held elected office, Macron has seized on the growing resentment towards a political elite perceived as out of touch, and on public frustration at its failure to create jobs and spur stronger growth, to win the presidency.

In winning the presidency in May, he filled a political vacuum created by disarray within the Socialist Party and the Republicans, with Sunday night capping a sequence of events that looked improbable a year ago.

The Republicans and their conservative allies will form the largest opposition bloc in parliament with 131 seats, while the far-right National Front won eight. The Socialist Party and allies won just 44, their lowest in decades.

“The collapse of the Socialist Party is beyond doubt. The president of the Republic has all the powers,” Jean-Christophe Cambadelis said late on Sunday after announcing he would step down as party chief.

Sunday’s election saw a record number of women voted into parliament, due largely to Macron‘s decision to field a gender-balanced candidate list.