19 June 2024

Comment: why is the rooster the symbol of France?

Today the European Commission is widely expected to scold France for breaching EU budget rules, yet another gust of wind in the storm brewing in 'Gaul' – the Roman name of modern France, which links to its symbol – the rooster.

If officially France's association with the rooster comes from a play on words - the Latin word gallus means both 'Gallic' and 'rooster' - the unofficial association is that the rooster is the only animal that continues to sing with both its feet in dung!

France, alongside Italy, Belgium, Malta, Slovakia, Hungary and Poland will face an excessive deficit procedure from the Commission, meaning they will be pushed to tighten their fiscal policies, in order to avoid the potential of being fined.

The timing of such a procedure couldn't, sarcastically put, have been better – France is in the midst of a snap legislative election called by President Emmanuel Macron and, if polls are to be believed, he is about to lose his majority, and his government will fall.

What comes next, is the million-dollar question. Having syphoned moderates from the right and the left into a central bloc, Macron has left a boulevard for the extremes - both of the left and the right - to prosper.

The election will see three blocs sparing off: Macron's weakened centrists, a union of the left coined the New Front Populaire (NFP, and the far right Rassemblement National (RN). The latter is on a roll, following its success in the recent EU parliament elections.

In an interview with French newspaper Le Monde, finance minister Bruno Le Maire predicted a debt crisis if the far-right or the NFP got into power and implemented their programmes.

"We have a financial situation that should lead us to make savings, so we can invest and reconstitute margins for manoeuvre in the event of a new crisis," he told the newspaper. "Yet the platforms of both the far left and the far right are financially unbearably careless."

Without even taking sides, one can't help wonder what type of carelessness led to France facing the EU Commission's disciplinary procedure... Perhaps, Le Maire, who has been finance minister for the last seven years, has an idea?

Polls suggest the far-right will win the election in two weeks' time, perhaps not by an absolute majority, not even a relative majority, but coming on top.

This has already led financial markets to react, with the spread between French and German 10-year yields widening, since the snap election was called, to a seven-year high standing at 73 basis points this morning (19 June).

This is not the first time the spectre of extreme politics in Europe has shaken financial markets, of course. A right wing coalition led by Giorgia Meloni winning Italian elections in 2022 kept BTP/Bund spreads wider than gilt/Bund spreads even in the brief depths of Liz Truss's prime ministership – a feat that took quite some doing.

Emmanuel Roman, CEO of Allianz's giant fixed income manager PIMCO, told French media he has read the RN's 22 points program in full.

"I can say that there isn't a single element addressing the real macroeconomic issues," he said. "Markets are capable of taking a longer-term view. They know that Europe has been through many ups and downs and has been able to manage complicated situations, like Greece, for example. That said, an economic policy that doesn't make sense is immediately punished by the market."

One would hope voters themselves would be equally as punitive... but if French politicians of all parties, need a lesson on market punishment, perhaps former UK prime minister Liz Truss and former chancellor Kwasi Kwarteng would be available for a chat over a salad lunch?

From bad to worse – or from the serious to the more trivial - the French economy's and politics' bloodied noses mirror that of France's current football hero – Kylian Mbappé, who is set to miss the rest of the group stage of the UEFA Euros nursing a broken nose.

Amidst the general gloom, the French might still find solace in sport - their national men's football team remains one of the tournament's favourites, and should that fail, the Olympics are just around the corner – offering plenty of occasions for France and its politicians to sing, like the beloved rooster, with both of their feet in deep 'merde'.

It is true, after all – the more things change, the more they stay the same: panem et circenses!