Marine Le Pen has repeatedly underscored her desire to mend fences with Russia so that Europe has a peaceful future ahead. She lashed out at the Western sanctions against Russia as “stupid” and recognizes Crimea as part of the Russian Federation.
She believes that France should maintain equally good relations with both the US and Russia, that it has no reasons for waging a cold war with Moscow and needs closer diplomatic, trade and strategic relations with Russia, which she calls “a great country.”
Emmanuel Macron also wants to rebuild relations with Russia and engage into intense and frank dialogue, even though Paris’ vision does not totally correspond with that of Moscow.
Unions and alliances
France’s possible exit from the European Union was the centerpiece of Le Pen’s agenda ahead of the first round vote in April. She has since softened her anti-EU rhetoric a bit and now says she wants to supplant the EU with a “European alliance of free and sovereign states.”
Marine Le Pen said her first order of business on setting foot in the Elysee Palace will be to propose negotiations to radically overhaul what she described as “a totalitarian union,” and announce referendums on EU membership and on withdrawing from the European Union.
Investors breathed a sigh of relief following the first-place showing of centrist and pro-European Union candidate Emmanuel Macron in the first round of France’s presidential elections Sunday, sending the Euro to a five-month high relative to the dollar. Populist Marine Le Pen ranked second in the voting.
Why it matters: The results make it more likely that Macron will be France’s next president, keeping France in the EU. That should have a positive impact on both French stocks and the U.S. economy.
Paris rising: High Frequency Economics’ Carl Weinberg predicts that French stocks will rally in trading Monday, and that interest rates on French government debt will fall. France isn’t out of the woods, however. Weinberg writes that Macron will have a tough time corralling a divided Parliament to implement pro-growth reforms.
Domestic affairs: A Blackrock Investment Institute note to clients calls Macron a “business friendly” candidate that will not get in the way of Europe’s improving economy. The U.S. economy has seen the benefits of faster growth in Europe—political stability across the Atlantic is good for business here.
Caveat: David Zahn of Franklin Templeton Investments warns that “it’s not a done deal yet,” and that the push and pull of a high profile election will cause “markets to remain volatile in the run-up to the final round of voting on May 7 and potentially even beyond.”
Michel Barnier, the EU’s chief Brexit negotiator, has dampened hopes for a speedy UK exit and trade deal, warning talks will be bedeviled by details over the next two years.
“Theresa May’s [Article 50] letter seeks a rapid agreement, but quite clearly the devil is going to be in the detail. The six months work I’ve done so far points to that”, said Mr Barnier, addressing MEPs in Strasbourg on Wednesday.
The former French foreign minister, who will be carrying out Brexit negotiations on behalf of the EU, said Britain’s desire to carry out its divorce talks alongside arrangements for a free trade deal was a “very risky approach”.
“We are not proposing this to be tactical or to create difficulties. It is an essential condition to maximise our chances of reaching an agreement together in two years. It is our best chance to build trust before proceeding to the second phase.”
After yet another round of inconclusive bailout talks in Athens, Prime Minister Alexis Tsipras said he believed a comprehensive deal with creditors could be reached by April while taking a dig at the International Monetary Fund over its tough stance on labor rights.
In comments to reporters at the end of a summit of European Union leaders in Brussels, Tsipras said he believed a technical-level agreement could still be reached in time for a March 20 Eurogroup, with a broader accord, including the specification of medium-term debt relief measures, coming in April.
Tsipras indicated, however, that tough talks on collective wage bargaining would be harder to conclude. “That issue can’t be solved at the technical level. There’s a disagreement,” he said, adding that the IMF must understand that Greece is a European country and that non-European labor models cannot be imposed on it.
In a related development, IMF chief Christine Lagarde said Tsipras asked the Fund “to stand by Greece” in its third bailout program.
“To commit to Greece, as the Greek prime minister has requested, in addition to reforms, the debt should be sustainable,” Lagarde told French newspaper Le Parisien in an interview.
Tata Steel is to shut its £15bn UK retirement fund at the end of this month, in a move that could help safeguard a future for Britain’s largest steelmaker.
The Indian steel giant said on Tuesday that following a consultation with its UK workforce, it would close the final salary scheme to further accrual, after it became a serious financial drag on its British operations.
Last month, thousands of Tata’s UK steelworkers voted in favour of the proposal, which forms part of a rescue plan to put the troubled business on a sounder footing.
In return, Tata has pledged to guarantee production at the giant Port Talbot plant in south Wales until 2021, keeping both its blast furnaces lit, as well as to invest £1bn into the business.
In surprising comments that may rekindle a verbal currency war between president Trump and Europe, German finance minister Wolfgang Schäuble told German newspaper Tagesspiegel that in his opinion the Euro is “too low” for Germany, echoing criticism from Trump’s trade advisor Peter Navarro, who last week told the FT that Germany was exploiting its US and EU partners by using a “grossly undervalued” euro to create a vast trade surplus. The comment placed Germany, alongside China and Japan, in a category of countries that the Trump administration has accused of currency manipulation for competitive advantage.
As the FT reports on Sunday morning, Schauble acknowledged that the ECB had to set monetary policy for the eurozone as a whole, but said: “It is too loose for Germany.” A recent chart from Morgan Stanley confirms that on a PPP basis, the EUR is over 40% undervalued for exporting and current surplus powerhouse Germany on a standalone basis, however for many of Europe’s peripheral countries it still remains expensive.
What was more curious about Schauble statement is that the German finance minister blamed the European Central Bank for the low exchange rate.
The eurozone’s annual inflation rate climbed above the 1 per cent mark for the first time since 2013 in December, underscoring the impact of climbing energy costs on consumer prices which have lagged at worryingly low levels for the last three years.
At 1.1 per cent, year-on-year inflation in December was confirmed in a second reading from Eurostat, which also showed an uptick in core inflation to 0.9 per cent.
But the inflationary performance across the 19-country bloc remains mixed – a development that could pose a headache for the European Central Bank, which targets average price growth of just below 2 per cent.
Germany, Europe’s largest economy, recorded a more than three-year high of 1.7 per cent last month while Italy remained more sluggish at 0.5 per cent.
1) PM May views the Brexit vote as a vote to restore parliamentary democracy and for Britain to become even more internationalist. “It was the moment we chose to build a truly global Britain”.
2) The first aim of the Brexit strategy is to provide certainty where we can.
3) The final Brexit deal will be put to a vote in both Houses of Parliament.
4) The government will ensure control of immigration to Britain after Brexit.
5) The government will pursue a bold and ambitious free trade agreement with the EU.
6) It can’t mean retaining membership of the single market.
7) The government will seek the greatest possible access to the EU which may take in some elements of the single market.
8) The UK will not be required to contribute “huge” sums to the EU budget, but we should make an appropriate contribution.
9) The UK must be free to strike trade deals with countries outside the EU.
10) The government does not want Britain to be part of the common commercial policy, but they do want to have a customs agreement with the EU. It could mean a customs agreement with the EU has to be new or for Britain to be signatory to the agreement.
11) The government wants Britain to be free to establish its own tariff schedules at the WTO, and remove as many tariff barriers to trade as possible.
12) The government will seek to avoid a disruptive Brexit cliff face adjustment and believes a transition will be in the interests of both Britain and the EU.
Stocks dipped Thursday but finished off early, sharp lows, giving back gains from the day before.
The Nasdaq composite, off 0.3%, snapped a seven-day winning streak and posted its first loss of 2017.
Losing as much as 180 points earlier, the Dow settled for a 63-point loss, 0.3% lower, to 19,891 even. The S&P 500 slipped 0.2%.
Financial, industrial and technology stocks were down the most, while phone company and real estate stocks edged higher. Investors were turning their focus to the next wave of corporate earnings reports in the weeks ahead.
Banks and other financial companies were down as the yield on the 10-year Treasury note fell. Lower yields mean lower interest rates on loans and lower profits for banks. The yield on the 10-year Treasury slipped to 2.35% from 2.37% late Wednesday.
Benchmark crude oil finished up 76 cents, or 1.5%, to $53.01 a barrel in New York.
In Europe, Germany’s DAX ended down 1.1%, while France’s CAC 40 lost 0.5% despite new data showing eurozone industrial production jumped 1.5% in November. Britain’s FTSE 100 ended flat. In Asia, Japan’s benchmark Nikkei 225 dropped 1.2%. Hong Kong’s Hang Seng dipped 0.5%, while Australia’s S&P/ASX 200 slipped 0.1%. South Korea’s Kospi bucked the trend to rise 0.6%.