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Bond markets get French election jitters

Wednesday, January 25, 2017 - 01:40

As nerves around France's presidential election start to play out in debt markets, a new political scandal involving front-runner Francois Fillon's wife, Penelope, could play into the hands of his opponents - including National Front leader, Marine Le Pen. David Pollard reports.

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She could be France's first lady. But front-runner Francois Fillon's wife Penelope is under a glaring media spotlight - for payments she's said to have received for allegedly fictitious work - as his assistant. Her bad news perhaps good for the woman who wants to be France's first lady president. Despite her objections to the scandal itself. (SOUNDBITE) (French) LEADER OF FAR-RIGHT NATIONAL FRONT PARTY AND PRESIDENTIAL CANDIDATE, MARINE LE PEN, SAYING: "It doesn't mean you're guilty but it allows people to throw dirt on others in the media. I won't get involved in the politics of smear campaigns." Voters go the polls in April. Here in Nice, they're preparing for carnival next month. With a populist twist ... Donald Trump's victory raises the risk that Le Pen could make dummies of not just Francois Fillon - but another front-runner, former economy minister, Emmanuel Macron. It's making markets nervous. (SOUNDBITE) (English) HEAD OF CORPORATE DEVELOPMENT, 7IM, JUSTIN URQUHART STEWART, SAYING: "Even if she wins the first round, typically you will find her not being able to win the second round. However, if the opposition is divided enough, and you find that not just Monsieur Fillon, but Macron and others staying in there, if they divide that vote up and then find actually a position where Marine Le Pen could actually able to maintain that lead, maybe the impossible might just happen." The nerves driving the spread between French and German borrowing costs to its widest in nearly three years. An early tell-tale that investors take Le Pen's election pledges more seriously. France out of the euro - possibly out of the euro project. The impossible just seeming a little more possible after all.