Why is Le Pen labelled as right-wing?!

I don’t enjoy saying this but there’s nothing else to do: The presidential elections in France might bring many surprises.

French politics is at the time under the pressure of scandals and M. Le Pen has the clearest position. She is not facing any scandals at the time but she published her detailed plan what is she supposedly going to do once she becomes president – and the financiers are somewhat getting chills from it.

Actually, I don’t even know why is Le Pen labelled as right-wing in the media when she wants to raise the social benefits and lower the retirement age. Le Pen is definitely not right-wing. She is rather surprising and different: Besides leaving the Eurozone and EU she wants to also leave NATO. And at the same time, she wants to pursue – according to her own words – “intelligent” protectionism. By the word intelligent she probably means that she will outsmart hundreds of years of economy and make up some protectionism which is going to be prosperous for the country despite all rules of economy. (Which will hardly happen.) So the financial market is pretty scared of her victory. And it is not even a fear of leaving the EU but rather a fear from said mysterious “intelligent” protectionism.

But let’s look at that closer: Transformation of bonds denominated in euros to bonds denominated in new francs would supposedly bring a French bankruptcy according to many. I don’t think that. Those are rather similar fairy tales to those that BREXIT will bring a catastrophe which is not showing in any way so far.

Nevertheless, nobody has an experience with anything similar so the fear is understandable. The difference in yields of French and German bonds has climbed up because of that to four-year maximum today. So that is confirming that many are truly scared of the French bonds and that it’s not only gossips. French bonds are being seriously sold. But even other south European bonds are being sold as well. For example, the difference of yields between German and Italian bonds is the highest in 2.5 years. That is a lot and it is pointing at disintegration fears.

At the same time, the American (truthful) statement about how Germany is profiting of euro is coming back to the game: Italian economy is in real GDP per capita by 0.4 % lower today than in the year 1998 and on the contrary, Germany is by 26.1 % higher. Or the euro surely didn’t help Italy. Even Greece is doing better than that as far as change of GDP per capita is concerned. And this unfortunate trend of opening scissors will continue because the latest data from Germany are excellent – German industrial orders published today are the highest in 2.5 years. While the domestic German demand is growing by 6.7 % the foreign one by 3.9 %. Rest of Europe is basically slowing down Germany and that’s why it has to focus more and more on China and the USA.