Macron’s re-election reassures on policy continuity, but reform doubts hang over credit outlook

President Emmanuel Macron was re-elected for a second term as expected, but the relatively narrow margin of victory over far-right challenger Marine Le Pen raises questions over the popular support for his reform agenda.

“The biggest uncertainty at present is to know whether President Macron will be able to renew the majority of his ‘République en Marche’ party in the legislative elections set for June,” says Thomas Gillet, associate director, sovereign and public sector ratings, at Scope Ratings.

“The outcome of those elections will therefore prove decisive in assessing the real momentum behind his reform agenda. Weakening popular support would require postponing or scaling down reforms that are critical for France’s credit outlook,” Gillet adds.

The next government in France (AA/Stable) needs to tackle structural economic and social challenges such as rising public debt, declining productivity and competitiveness, residual labour market rigidities, in addition to addressing the rising cost of looking after the country’s ageing population and energy transition – all in the context of higher inflation and the repercussions of the war in Ukraine.