Why France's Industry Is Failing To Break Out Of Recession?

A French court barred the country's leading candidate in the 2027 presidential elections from running for office for the five years in another worrying sign democratic norms are eroding in the European Union (EU).

A Paris Criminal Court convicted Marine Le Pen, the right-wing National Rally (RN), of "embezzlement of public funds." On March 31, the court sentenced 56-year-old leader to four years in prison, with two years suspended and two to be served under house arrest.

France is the third member of NATO this year to bar a candidate from running in elections. Romania barred a far-right populist from participating in May's upcoming presidential election. Turkey imprisoned President Recep Tayyip Erdogan's political rival as well.

"In a democracy, the way to beat extremists…is at the ballot-box," Johns Hopkins University professor of political science Yascha Mounk told CNN on April 5. "If we empower courts to cancel the outcome of elections because we're shocked by who the winner is, we're very close to living in a system of government whose ultimate arbiters are judges rather than people."

Le Pen's RN received 37% of the votes, the most of any party, in the French national election in June. That represented a significant increase compared with only 0.08% of votes in 2007.

French Court Bars Le Pen As Popularity Grows

Le Pen's party has moved from margins of France's political landscape to the center. Partly driving that support has been the French resistance to the increase in foreign-born immigration.

Elabe, a pollster for France's BFMTV news broadcaster, reported that Le Pen would easily win the first round of France's presidential elections. Their April 5 poll showed Le Pen with about 36% of the vote, more than the most popular candidates in recent history.

Le Pen's prosecution is reminiscent of legal attacks against Donald J. Trump leading to the November US presidential elections. RN party officials accuse the French government of waging lawfare against Le Pen, given her popular support.

"She was the person who seemed most able to represent all the people who feel left behind and ignored and in that sense there is an obvious parallel with Trump," Cambridge University's professor emeritus of French history, Robert Tombs, told the Spectator.

Court Accuses Le Pen of Illegally Using EU Funds

The court ruled that Le Pen illegally used EU funds to hire four assistants as a European Parliament (EP) member. Prosecutors argued that the assistants worked on RN party matters, not just EP activities, from 2004 to 2017. They fined Le Pen €100,000.

In an interview on TF1, a French news broadcaster, Le Pen condemned the court’s ruling.

"Millions of French people are indignant," Le Pen said. "Indignant to an unimaginable extent seeing that in France…judges have implemented practices that were thought to be the preserve of authoritarian regimes."

Le Pen's defense said they would appeal the verdict. They argued that the distinction between a politician's work as a party member and legislator is artificial. The Paris Court of Appeals will review the case within a time frame that may allow her to run if the conviction is overturned or the sentence is altered.

Court Decision May Undermine Business Confidence

The criminal court said allowing "a person who has already been convicted to be a candidate" would be a "major disruption" to democracy. In the past, the appeals court has postponed such types of sentences pending appeal.

The renewed political uncertainty will likely add to concerns about Europe's second-largest economy. In March, household confidence fell by one point to 92 from February. It remains below its long-term average, according to INSEE on March 26.

Households’ opinion on their future standard of living in France has deteriorated. Their sentiment on the ability to save fell slightly. The proportion of households expecting prices to accelerate over the next 12 months increased.

France's March manufacturing climate indicator edged to 96 from 97 in February. It missed market expectations as its moved below its long-term average of 100.

"France’s industry is failing to break out of recession," Dr Tariq Kamal Chaudhry, Economist at Hamburg Commercial Bank, said on April 1. "The situation remains sobering. French politics "remain a major impediment, as uncertainty from Paris hampers investment."

The CAC 40, a French benchmark stock index, fell 0.77% on the day of Le Pen's sentencing, closing at 7,790.

Supporters Protest after French Court Bars Le Pen

From Paris to Marseille, Le Pen and the RN supporters protested on April 5 and 6 to protest the suspension. RN leader Jordan Bardella said the demonstrations called for a mobilization “in support of French democracy."

Ben Ansell, a professor of comparative democratic institutions at the University of Oxford, told CNN that Le Pen is "playing the victim."

Far-left French parties held counter-demonstrations over the weekend of April 5. French President Emmanuel Macron's Renaissance party called the public outcry against the court's decision an "existential threat to the rule of law."

"There is no doubt that she is guilty of what she is charged with," Tombs said. Le Pen's actions are "not much of a crime," he added.

Le Pen, RN Support May Increase after French Court Ban

Prosecutors tried current Prime Minister François Bayrou and members of his Democratic Movement party on similar charges. He won an acquittal because of insufficient evidence of direct involvement. The prosecution has challenged his acquittal.

Le Pen’s behavior is not "uncommon" for politicians who are members of the EU parliament, Tombs said. "So the questions would be why now and why her?"

Bardella would likely take Le Pen's place as the party's candidate. He would win around 36% of the vote in the next presidential election.

The sentence against Le Pen may prevent her from becoming France's next president. "It is likely to add to the political instability and uncertainty,” European Policy Centre's policy analyst Eric Maurice wrote after the court ruling.

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