One year ago, when he was still president, Francois Hollande scandalized the establishment when it emerged that amid record unemployment, painful labor reforms, a sliding economy and the most serious social unrest in decades, the French president"s personal hairdressed was getting paid a gross salary by the state of ~$11,000 per month (more than a European parliament member). As the media reported at the time, "the hairdresser, who the leaked contract names only as Oliver B, is set to earn half a million pounds over the course of Hollande’s current premiership, in exchange for being available at every waking moment and signing a contract promising not to speak about his position."
The fact that this was probably not the best way to spend French taxpayers" money was confirmed this past summer, when Hollande"s approval rating was so low, the socialist president did not even run for re-election: a first in French history. Sadly, this was lost on Hollande"s former Minister of Economy - and current president - Emmanuel Macron who failed to learn from the mistakes of his former boss.
According to French magazine Le Point, French President Emmanuel Macron spent €26,000 - over $30,000 - on makeup in his first three months as leader of the country.
As Politico adds, "Macron’s personal makeup artist put in two claims for payment, one for €10,000 and another for €16,000, for doing his makeup during his travels and ahead of press conferences."
When asked about this abuse of taxpayer funds, The Elysee Palace said in response: “We called in a contractor as a matter of urgency.” Still, aides said that spending on makeup would be “significantly reduced” in future, Le Point reported.
It gets better: according to the report, the amount spent was less than under Macron’s predecessors. Francois Hollande, for example, was said to spend €30,000 per quarter on makeup, including the salary of a makeup artist. Which means that in addition to his hairdresser who ran just under €10,000, the former French president spent over quarter million dollars in taxpayer funds every year to look good. One almost wonders why he left the French political scene with an approval rating in the single digits. As for Hollande"s arguably even more vain predecessor, Nicolas Sarkozy spent slightly less on his makeup then Macron: €8,000 a month.
The news comes as Macron’s popularity is plunging according to a new Harris Poll. Only 37% of voters approve of the job Macron is doing, down from a high of 57% after his election in May. Today"s incident will not help his popularity.
Macron"s popularity collapse means that his fall from grace was even faster than that of Trump, although oddly enough, one will not read much, if anything, about that particular collapse in the objective and unbiased western press. It could be a problem for France, however, during the next election when that one third of eligible voters who did not vote for either Macron or le Pen, finally decide to vote against the establishment cadidate.
The confetti were still littering Paris from Macron"s celebration event on Sunday night when the 39-year-old Frenchman became the youngest president in French history, and already he met with one of the biggest challenges facing his new administration: a population, mostly among the local labor unions, that is unwilling to accept any if not all of the proposed economic reforms, and made this abundantly clear on Monday by clashing in violent protests across Paris with the local riot police.
That"s not the only reason why Emmanuel Macron may find the hangover of his bitter fight with Marine Le Pen unpleasant. As The Local writes, while Macron"s supporters were jumping for joy at the Louvre and commentators all over the world were hailing Emmanuel Macron"s victory as a triumph for liberal and centrist values, a majority of French people won"t have seen it as a cause for celebration. And although Macron should be relieved, there are a few major reasons why he should stay off the Champagne this week.
Below, according to the French publication, are eight reasons why Macron has little reason for celebration as he prepares to replace Francois Hollande as the next French president.
1. He didn"t win over the majority of French people
In the second round, 56 percent of French people either abstained, cast a blank vote or voted for Le Pen. He may have won a majority of the vote, but that doesn"t make for a majority of French people. Even in first round vote, when French people "vote with their hearts" and choose the candidate they really want, Macron didn"t do spectacularly.
On April 23rd some 8.6 million people voted for Macron, out of a possible 47 million, so in reality, you could argue that only a 6th of French voters would have Macron as their first choice. But even in the first round he benefited from tactical voting.
The scores registered for Macron, Le Pen and for abstention in the second round of the French presidential election pic.twitter.com/9BCaamP5qR
2. Many of those who voted for him aren"t really behind him
Of those who did vote for him, many said were doing so simply because he wasn"t Marine Le Pen. Some 33 percent of respondents in an Ipsos poll said they voted Macron because they were won over by the political renewal they saw in him. Sixteen percent put his policies top of the list, while 8 percent said his personality was the main reason they voted for him.
However the largest chunk, 43 percent, said they were mostly voting against Le Pen.
3. Le Pen is on the move too
The far right scored a record number of votes in the first round (7.6 million) and then went and did it again in the second round, topping the 10 million mark (10.6 million to be precise). The far right are on an upward trajectory and Le Pen is hinting at a new rebranding and strategy in her post-results speech. To be fair to Macron he recognized this fact in his victory speech and vowed do everything to stop people voting for extremes. Easier said than done in a divided France suffering from unemployment.
4. En Marche! will have a hard time getting a majority
Macron will face a host of difficulties trying to gain a majority of seats in the parliamentary elections with such a newly created party. Without that he"ll have a hard time passing the laws he wants. The Republicans are gearing up to try and gain a majority in parliament, in which case Macron would be reduced to not much more than a figurehead of France"s government.
Even if En Marche! ends up the leading party, finding another group to ally with to pass reforms will be a tough task. Macron"s MP"s will face four clear blocks of opposition from Jean-Luc Melenchon"s "Unbowed" to whatever is left of the Socialist Party come June, to the Republicans and Marine Le Pen"s far right National Front.
That"s unprecedented in French politics. And on top of that, En Marche is under-financed and unlike the long established parties, it doesn"t have a long-standing coffer to dip into.
5. Parts of the country rejected him
Le Pen"s strongholds in the north east held firm, gaining 57.42 percent of the vote in Calais and 61 percent in Hénin-Beaumont. In the Aisne department, Le Pen came out on top in 619 out of 804 communes. Le Pen scored well on France"s Mediterranean coast in the south east, getting close to 50 percent in many departments, like the Var, where she gained 49 percent.
6. He could be doomed to follow in Francois Hollande"s footsteps
Macron has a lot on his shoulders, knowing that if he fails to get results on issues like unemployment during his five years he could see the same fate as Hollande, who was so unpopular in France he became the first French president not stand for a second term. Many French people already see too much of a similarity between Macron and his predecessor. Le Pen dubbed him "Hollande"s baby" or "Hollande"s heir".
Fail to deal with unemployment and he will end up having more in common with his predecessor than he would have wished.
7. Unions are already on his back
Worker"s unions in France aren"t about to let Macron forget the huge opposition against him, despite the win. Already there have been protests, with a demonstration against the election held at la Republique in Paris on Monday organised by Front Sociale, a collective of worker"s unions and associations.
The CGT"s Michael Wamen said: “He is no an elected president, he is like a president-CEO.”
If Macron wants to reform labour laws - and he said he will do by decree - then he can expect more uprisings in the months and years to come.
8. His to do list
Has an incoming president ever had so much on his to-do list from day one? Macron must try to reconcile the country, cut unemployment, restore faith in Europe, even reform the EU, boost the economy, deal with the terror threat and dangerous jihadists returning from the Middle East, find a way for France to be ease with Islam and immigration, help forge a new identity for the country so it feels at ease with its place in the world
Macron won the French presidential elections against Marine Le Pen. Now comes the hard part.
Emmanuel Macron may have won Sunday"s presidential election by a comfortable margin, but even his supporters" enthusiasm is tempered by the scale of the challenge that the inexperienced politician faces in tackling France"s deep-seated economic, social and security problems, Reuters notes. Macron, the former economy minister of the Francois Hollande - whose regime led to a dramatic deterioration in the French economy - and who had never previously stood for elected office, is facing his first major protest less than 24 hours after being elected, with activists and unions holding a protest on Monday against Macron’s proposed labour reforms plans.
And, according to French press reports, tensions are rising in the post-vote protest in Paris against President-elect Emmanuel Macron, as well as against the upcoming economic reforms. Police have briefly engaged in scuffles with protesters, according to Reuters, which adds that a hundred and forty-one people were arrested in Paris after trouble flared overnight following Emmanuel Macron"s victory in France"s presidential election, police said on Monday.
Those detained in Menilmontant, a north-eastern district of Paris, were accused of offences ranging from throwing missiles at the police to damaging property. The demonstrators were protesting both against Macron - criticized by many on France"s far left as a member of a discredited elite in thrall to global capitalism - and against his defeated far-right nationalist rival, Marine Le Pen.
Riot police stands in a street while people take part in a demonstration on May 8/ AFP
“He is not our president”, “Say No to the new labor reform!”, “Say No to repression”, read the banners held by demonstrators.
Representatives of trade unions, left wing groups, as well as anti-fascists and anarchists are taking part in the rally, according to French media
— Marie-Lys Lubrano (@MarieLysLubrano) May 8, 2017
“En Marche! is pushing towards social war” said another banner held by protesters. The En Marche! political party was created by Macron in 2016 after he stepped down as Economy Minister under Francois Hollande’s government to join the presidential race.
Activists announced before the presidential run-off that they would demonstrate regardless of who won, saying that both Macron’s and rival Marine Le Pen’s policies are anti-social.
The protests are not over: the hardline leftist CGT labor union planned a demonstration in the capital later in the day against the kind of liberal economic policies that Macron espouses.
Update: As Emmanuel Macron arrived in the courtyard of Paris"s Louvre museum to deliver his victory speech to thousands of supporters, the European Union"s anthem "Ode to Joy" played in the background.
"Tonight, France won," he said to rapturous crowds, adding that "Europe and the world are watching us." Macron said, cited by the Telegraph, that France is facing an "immense task" to rebuild European unity, fix the economy and ensure security against extremist threats.
"Our task is huge and it will require the courage of truth” he repeated. Speaking to thousands of supporters from the Louvre Museum"s courtyard, Macron said that Europe and the world are "watching us" and "waiting for us to defend the spirit of the Enlightenment, threatened in so many places."
“We have the force, the will… we will not give into fear, into lies… to the love of decline and defeat”
Macron said "everyone said it was impossible. But they didn"t know France!" and promised to work to unify France after a bruising presidential campaign and serve the country "with love."
He also vowed to the French public: "I will protect you in the fact of threats" and said “I will respect what everyone thinks and believes, because I want the unity of our country. I will serve you with humility, strength and in line with our motto: liberty, equality, fraternity… I will serve you with love.”
His wife Brigitte then came up on stage with him, and she kissed his hand and waved to the crowd.
Watch: French President-elect Macron addresses Le Pen supporters, vows to “protect” the country in acceptance speech https://t.co/ieXe16OjJZ
After an extraordinary election campaign full of twists and turns, Emmanuel Macron won a dramatic victory over Marine Le Pen in the French presidential election, taking 65% of the vote, with Le Pen collecting just over a third according to estimates from four separate French pollsters. Macron, 39, will become the youngest president of France"s Fifth Republic.
As BBG notes, the firms sampled real votes as they were being counted and weighted their results to reflect the composition of the French electorate. Their projections were all within 1 percentage point. Indeed, all early polls all show Macron with at least 65% of the vote:
Abstention in Sunday’s election was expected to hit 26%, the highest rate since 1969, reflecting a lack of enthusiasm among many voters for the choice on offer.
Macron was grateful and generous in his victory speech:
"Thank you from the bottom of my heart to all those who voted for me," begins Mr Macron in his victory speech.
"I salute my adversary Ms Le Pen, I know why people chose to vote for an extreme party. I know the doubt, the fear they expressed.
"And it is my responsibility to take on those concerns and guarantee our unity and responsibility for our country.
"From tomorrow we will modernise politics, recognise pluralism, revitalise democracy. This will be my first mission, respecting everyone."
Althought there was one small glitch...
Moments after the results were announced, Le Pen conceded to Macron in a phone call and vowed to become major force of opposition,
“The French have elected a new president and opted for continuity,” Le Pen told supporters just outside Paris. “I wish him success in the face of great challenges,” she said.
The AFP reports that it has spoken to Macron since the election results. France’s president-elect says “a new page has turned, that of hope and of restored confidence”.
The reactions to Macron’s win are coming in fast and hard: French President François Hollande, former Prime Minister Manuel Valls, German Chancellor Angela Merkel, British PM Theresa May are just some of the major political figures and leaders who have been congratulating modern France’s youngest president-elect over the past few minutes.
BELGIUM"S CHARLES MICHEL SAYS "BRAVO EMMANUEL MACRON"ON TWITTER
GERMANY"S SIGMAR GABRIEL CONGRATULATES EMMANUEL MACRON
MACRON WIN STRONG SIGN FOR UNIFIED EUROPE: GERMANY"S SEIBERT
MACRON WIN A "SIGN OF HOPE" FOR EUROPE, MOSCOVICI TWEETS
European leaders hailed Macron"s victory as a vote for European unity and a blow to political forces that had sought to build on last year"s Brexit vote to tear apart the European Union.
"Your victory is a victory for a strong united Europe and for German-French friendship," German Chancellor Angela Merkel"s spokesman Steffen Seibert tweeted to Macron shortly after the election results were published.
Donald Tusk, the former Polish prime minister who chairs summits of European leaders, tweeted: "Congratulations to French people for choosing Liberty, Equality and Fraternity over tyranny of fake news" - an apparent reference to misleading stories about Macron that were spread on social media in the run-up to the vote.
In a tweet from her spokesperson, British Prime Minister Theresa May warmly congratulated Macron. "France is one of our closest allies and we look forward to working with the new President on a wide range of shared priorities," she said.
Italian Prime Minister Paolo Gentiloni tweeted: "Hurrah Macron President! There is hope for Europe!"
Even President Trump endorsed Le Pen in the election, but just fired off this conciliatory tweet:
Congratulations to Emmanuel Macron on his big win today as the next President of France. I look very much forward to working with him!
Geert Wilders, who stood as a Right-wing populist in the Dutch elections but lost out to Mark Rutte, has offered his commiserations to Ms Le Pen. He went on to predict both of them would win in the next election.
As Reuters adds, Europe"s political establishment limped into 2017 fearful that the Trump and Brexit votes, fueled by anger over immigration and rising economic inequality, could be replicated on the European continent in a mega-election year in which the Dutch and Germans were also voting. As a result, the election in France, the second largest economy in the euro zone after Germany, was always seen as the litmus test for European politics. Had Le Pen won, many European officials acknowledged, it may have been the beginning of the end of the EU, Europe"s 60-year-old experiment in closer integration which delivered peace and prosperity for decades before succumbing to a series of crises over the past decade.
As the FT put it. Macron’s victory is a "phenomenal achievement" for the 39-year-old former Rothschild banker, who has never before held elected office and whose political movement En Marche! was set up barely a year ago. He becomes the youngest ever French president.
As for, Le Pen, she fell short of the 45% that she was projected to win at one point earlier in the year. But her score of 34.9% is almost twice the 18% won by her father Jean-Marie Le Pen in 2002, and points to a depth of disaffection and anger towards France’s political elite that could nourish the far-right for years to come, especially if President Macron fails to deliver on his promises.
LE PEN CONCEDES DEFEAT OVER MACRON IN FRENCH PRESIDENTIAL VOTE
LE PEN SAYS SHE THANKS THE 11M FRENCH VOTERS WHO SUPPORTED HER
LE PEN SAYS TRADITIONAL PARTIES HAVE FAILED TO REPRESENT FRENCH
LE PEN CALLS FOR "ALL PATRIOTS" TO JOIN HER FOR COMING VOTE
Macron, a former government adviser and economy minister in the Hollande administration, will now turn his attention to elections for the National Assembly on June 11 and 18. He needs to build a stable majority from a party that as yet has no MPs. On Friday, he said he already had in mind his nominee for prime minister, a choice that could help him build alliances with MPs from other parties.
Shortly after the results were announced, BuzzFeed reported that LePen"s Front National is going to re-brand, and change its name after the election result. Le Pen said that "The National Front ... must deeply renew itself in order to rise to the historic opportunity and meet the French people"s expectations. I will propose to start this deep transformation of our movement in order to make a new political force."
— LEAVE.EU ???????? (@LeaveEUOfficial) May 7, 2017
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MARKET REACTION
Macron"s victory is in line with expectations, which according to several banks carries a "sell the news" risk, especially in EURUSD.
In a note released earlier on Sunday, Barclays" Giovanni Paci writes that "a Macron victory, in line with current polls, in the second round of the French Presidential election, carries risk of a “buy the rumor, sell the fact” downside move in EURUSD, given the current long EUR pre-positioning." On the other hand, "this outcome would also likely bring temporary relief and a further reduction in volatility." Because a VIX of 10 is high?
Some further details below:
Macron victory in line with polls carries risk of a “buy the rumor, sell the fact” downside move in EURUSD, given the current long EUR pre-positioning. The EUR political-risk premium was reduced significantly by the “benign” first round outcome, which supported a c.2% EUR NEER appreciation. EURUSD should depreciate mildly over the remainder of this year, as monetary policy divergence and some residual political-risk premia weigh on the common currency.
With market attention to the ‘Politics of Rage’ likely to fade after the French election, and no other clear themes visible, we see risk of a significant decline in market volatility. Implied volatility is low across asset classes (Figure 1) and, for most major currencies, realized and implied volatility measures are well below their yearly averages (Figure 2). Although we do not believe the Politics of Rage has yet crested, the outcome of the Dutch elections and the expected victory of Emmanuel Macron in France, are likely to assuage market fear of radical political change, at least for the near term, as no other clear risk events are visible. Risk-taking began to deteriorate earlier this year as ambiguity brought about by the ‘Politics of Rage’ dampened strategic risk taking. However, the resolution of near-term risks, with no other clear themes or major risk events to trade tactically, is likely to take activity and volatility further down.
... the election of Mr. Macron as president, combined with a potential hung parliament would leave in place long-held concern about reform, but remove acute risks that provided shorter-term trading opportunities. As long as short-term events bring about temporary relief and long-term risks, volatility is likely to remain depressed, but prone to sudden bursts.
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Deutsche Bank"s director of FX strategy, Sebastien Galy, has chimed in with a similar tak saying that while EUR/USD will likely gap higher, looking to clean out the stop losses, before eventually consolidating lower. He adds that equity flows are likely to increase into the euro zone, but that will take time as much is already priced in.
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Expect more sellside commentary as analysts react to the initial results.
Here is another live feed, this time from the Telegraph:
As noted earlier, following Macron"s victory the reaction in key FX crosses and pairs has been very subdued, suggesting today"s outcome was no surprise to traders at least in terms of technical positioning. Another reason why "the news may be getting sold" is that as Deutsche Bank and various other sellsiders suggested, another near-term hurdle looms in just a few weeks time with the French parliamentary elections.
Other immediate deliverables include naming a prime minister, forming a government, passing labor market reform, and negotiating Brexit. Here is a breakdown of what the immediate next steps facing the youngest ever French president are, courtesy of a late Sunday note out of Deutsche Bank.
France: Macron President, what next?
Emmanuel Macron won the second round of the presidential election capturing ~65% of the expressed votes against Le Pen. The turnout was satisfactory at ~75% but lower than previous presidential elections. Also, ~10% of the votes were blank, two to three times the usual share. Ultimately, far-left voters supported Macron more than expected by the latest polls.
This is a disappointing result for the National Front. In 2002, Jean-Marie Le Pen against centre-right candidate Chirac had gathered 18% of the expressed votes in the second round. In 2017, Marine Le Pen gathered 35%. The National Front rise is less impressive than these figures suggest. In 2002, it captured 14% of the electorate once accounting for abstention, and ~23% in 2017.
Macron will now have to name a Prime Minister with parliamentary experience, able to lead the lower-house election campaign and then manage the daily business of parliamentary politics. He mentioned that his PM name and government will be revealed after the inauguration that needs to happen by 14 May.
As we wrote in Focus Europe on Friday 5 May, recent electoral results and polls suggest that Macron"s party could be the main party in the French lower house post 11-18 June elections. An outright majority for his new party "En Marche!" appears numerically possible. If not, a majority could be reached with the participation of moderate centre-left and/or centreright MPs who have already expressed their preparedness to govern with Macron in such a situation. In the coming weeks, Macron will be hoping to convince them to directly join his party, while they may be very reluctant to take the risk.
In terms of reform timetables, Macron aims to pass labour market reforms quickly over the Summer 2017, take more time to pass unemployment reforms at the end of 2017 and take a longer perspective on simplifying the retirement system (see here for details).
Regarding Brexit and the EU, Macron has run on a pro-EU platform and has repeatedly explained his ambition to make France an equal partner to Germany. He will most likely prioritise the relationship with Germany over Brexit. A victory by Macron at the presidential election is unlikely to lead to easier negotiations for the UK.
As reported overnight, the anonymous source of documents alleging Emmanuel Macron"s involvement with an operating agreement for a Limited Liability Company (LLC) in the Caribbean island of Nevis returned to release several high quality images of the purported documents along with promises to release even more documents and identify account locations and the extent of the assets Macron is supposedly hiding from regulatory authorities.
Screenshot of image showing the alleged Macron signature on the operating agreement
The leaker noted that Macron"s assets were not located in the Bahamas as was been reported by some media outlets, but in the Cayman Islands, another known hotspot for tax evasion. They further stated that they were taking measures to conceal their identity because they are located in the European Union and did not wish to be arrested. The leaker also explained that they were one of a small group of individuals working online with a source in the Cayman Islands to expose the leaked information. They claimed that they were in possession of SWIFTNet logs dating back for several months, and would soon not only know where Mr. Macron"s alleged accounts are located but also the "extent of the money he is hiding from [France"s] government."
Then, earlier today, this is precisely what happened when 4chan released several gigabytes of email archives and files related to Macron. It was enough to attract Wikileaks" attention.
Alleged multi-GB team Macron email archives. Could be a 4chan practical joke. We are examining https://t.co/wLemQiYHT2
Then on Friday evening, Macron"s political party said its computer systems were hacked, after "thousands of emails and electronic documents purporting to come from the campaign were posted anonymously on the internet Friday evening." According to the WSJ , the files had been obtained several weeks ago from the personal and work email accounts of party officials, according to a statement from Mr. Macron’s party, En Marche!, or On the Move. The file dump comes less than two days before the final round of France’s presidential race, which pits Mr. Macron against far-right nationalist Marine Le Pen.
"The En Marche! Movement has been the victim of a massive and co-ordinated hack this evening which has given rise to the diffusion on social media of various internal information," the statement said.
The party said that the cache "includes both authentic and falsified documents with the goal of sowing doubt and disinformation,” which is another way of stating that anything that is potentialy damaging will be claimed to the fake, while the innocuous documents are "authentic."
Here is full statement from Macron campaign. It says authentic docs have been mixed up with fake ones, "to sew doubt and disinformation." pic.twitter.com/nhVckpd32p
As Reuters adds, an interior ministry official declined to comment, citing French rules which forbid any commentary liable to influence an election, and which took effect at midnight French time on Friday. Comments about the email dump began to appear on Friday evening just hours before the official ban on campaigning began. The ban is due to stay in place until the last polling stations close on Sunday at 8 p.m.
Already accusations have emerged that this is a hacking similar to what occurred with Hillary Clinton, when over 30,000 emails by John Podesta were leaked, exposing the "dirty laundry" of Clinton"s campaign, a hack she has subsequently claimed cost her the presidency. Naturally, the Kremlin has already been implicated as being behind the hack.
Could tonight"s hack have a similar impact on Macron? In a tweet, Wikileaks asks "who benefits?" and notes that the "Timing of alleged dump is too late to hit vote but will surely be used to boost hostility to Russia & intelligence spending."
Who benefits? Timing of alleged dump is too late to hit vote but will surely be used to boost hostility to Russia & intelligence spending.
Why #MacronLeaks will not change French election. Macron has a 13 point advantage and French media pre-poll blackout has already started. pic.twitter.com/lwAme93gNL
Perhaps Wikileaks is right, although it likely depends on what documents are disclosed inside the hack. Should it be confirmed that Macron indeed lied, as hackers have previously alleged, about an offshore account and engaging in tax evasion, his chances of winning could be deeply impacted. We will present any of the more notable documents we uncover.
