Melenchon Crashes Front-Runners’ Party as French Risks Rise

  • The left-wing candidate counts Chavez, Castro among his heros
  • Poll gain may be capped by zero-sum game with Hamon supporters

Supporter Says Melenchon Doing a 'Happy Campaign'

Under a cloudless blue sky at an outdoor waterfront rally of 30,000 people in Marseille on Sunday, Jean-Luc Melenchon showed why his rise in French polls is spooking markets.

Speaking without a teleprompter or notes and using his trademark mix of humor and anger, the Communist-backed far-left candidate of the France Unbowed party regaled the gathering with the evils of “extreme markets that are transforming suffering, misery and abandonment into gold and money.” He alluded to France as a country “with huge wealth that is badly distributed,” denounced the U.S. air strikes in Syria and called for France to leave NATO.

Get the latest news, polls and data on France’s presidential election

“A new enthusiasm is now stirring our fervor,” the firebrand orator, famed for his lyrical discourse, told the enthralled crowd. They cheered and egged him on, screaming “Resistance,” as he sprinkled his speech with references to ancient Greece, the Renaissance and revolution.

David Stubbs, strategist at JPMorgan Asset Management, says risk is rising in the French election.

Source: Bloomberg

Speeches like those have catapulted the 65-year-old fan of former Venezuelan leader Hugo Chavez and Cuba’s Fidel Castro closer than he’s ever been to the French presidency. Polls show that Melenchon is among four candidates now within striking distance of the second round of the French election, with a chance to gain enough votes on April 23 to make the runoff. With his plan to spend his way out of France’s economic woes, he is roiling markets.

The premium that France pays over Germany to borrow for 10 years rose to 75 basis points on Wednesday from less than 60 points in late March. Melenchon’s surge in popularity “is bad news for French bonds,” Aline Schuiling and Kim Lui, analysts at ABN Amro, said in a note to clients.

A Kantar Sofres poll over the weekend had Melenchon in third place with 18 percent, a point ahead of one-time front-runner Francois Fillon. The poll showed nationalist Marine Le Pen and centrist Emmanuel Macron tied at 24 percent ahead of the first round of voting, with Macron easily winning the May 7 runoff. Other polls put Melenchon level or just behind Fillon, but even that’s a major rise in the past few weeks. The Ifop daily poll April 7 had Melenchon at 17 percent, up from 10.5 percent on March 17.

If Melenchon and Le Pen make the runoff, “France could face a binary choice between unreconstructed communism and unrestrained fascism,” Bill Blain, a strategist at brokerage Mint Partners in London, wrote in a note to clients Wednesday.

Rising Unpredictability

Melenchon’s steady rise has turned France’s already topsy-turvy election campaign into one of the most unpredictable contests in recent history. The far-left candidate has a loyal, passionate following not unlike that of the anti-immigration, anti-euro Le Pen. Although still remote, the possibility of a face-off between the two is no longer dismissed as impossible.

“The impressive breakthrough of Jean-Luc Melenchon has totally reshuffled the cards of this election,” said Gael Sliman, head of pollster Odoxa. “With two weeks to go, we have four candidates who can still win, which is unheard of.”

French President Francois Hollande fears a Le Pen-Melenchon contest in the decisive round, Le Monde reported Wednesday, citing an unidentified person close to the outgoing head of state.

As Melenchon makes his second bid for the presidency, his followers are attracted by his uncompromising positions against globalism and Western militarism.

“He has the right ideas for the country,” said Tachefine Hocime, a 46-year-old maintenance worker and part-time musician, at a Melenchon rally in Le Havre on March 29.

Stimulus Plan

The candidate, who has been vocal against the European Union’s austerity push, says his platform calls for a 100 billion-euro stimulus program and the renegotiation of European treaties to give France more economic control -- with several conditions attached to staying in the euro.

He would make it harder for companies to fire, limit executive pay and pull out of free-trade deals. He wants to raise France’s minimum wage by 15 percent and lower the retirement age for some to 60 years with full pension. He would also seek to re-nationalize Electricite de France SA and Engie SA, and stop the construction of new nuclear plants.

“A Melenchon presidency would be unlikely to be followed by a parliamentary majority for the candidate, making it very difficult for the latter to implement his program,” said a note by Credit Suisse analysts to clients on Tuesday.

Debate Wins

That has not halted the rise in his popularity, which took off after a March 20 debate between the top five candidates -- with Melenchon at the time firmly in fifth place. He far outshone Socialist Party nominee Benoit Hamon and post-debate polls credited him with the best performance after Macron. He was again voted the most convincing of all the 11 candidates present at the next debate April 4.

Those performances -- where Melenchon mixed quips with angry denunciations of France’s economic situation -- came on top of the successful use of social media. Not unlike Senator Bernie Sanders during the U.S. campaign, Melenchon, the oldest of the main candidates, has the biggest presence on the Internet and is popular with young voters.

Social Media Star

He has the most consulted French campaign site, and the most subscribers, commentators and viewers on YouTube, according to Dentsu Consulting. His campaign has included touches such as using holograms to be able to address rallies simultaneously, and he once showed up at a McDonald’s restaurant to join blockading workers seeking pay rises.

“He’s been the absolute star on social media,” said Odoxa’s Slimane.

According to Ifop, 71 percent of the French rate Melenchon’s campaign as “good” or “very good,” ahead of Macron at 61 percent. Among voters under 35, Ifop says 23 percent plan to vote for Melenchon, behind the 27 percent who say they’ll opt for 39-year-old Macron, but ahead of all the other candidates.

“He has exciting rallies, he gives excellent interviews, he offers a real hard opposition,” said Edouard Lecerf, head of political studies at pollsters Kantar TNS.

Political Journey

It has been a long, hard journey to this point for the son of a post office worker and a teacher, both descendants of Spaniards and Italians who emigrated to French Algeria at the turn of the century. Melenchon was born in Tangier, now Morocco, when it was an international zone.

He moved to France at the age of 11, studied philosophy, did various jobs including as a journalist and proofreader and got involved in Trotskyist politics. He joined the Socialist Party in 1976 at the age of 25, and has been elected to various regional, national and European legislative positions.

He was deputy head of the Essonne region, south of Paris, from 1998 to 2004, and a junior minister in the Ministry of Education from 2000 to 2002. He broke with the Socialist party in 2008, saying it was becoming too business-friendly, and founded the Party of the Left.

A sign of Melenchon’s success is that candidates who once ignored him have taken to attacking him. While Melenchon was speaking in Marseille, Fillon said at a rally in Paris that his spending policies would turn France into Greece.

‘Potemkin Captain’

“Melenchon dreams of being the captain of the Potemkin, but he’ll end up selling the scraps of the Titanic,” Fillon said, referring to the Tsarist warship taken over by a communist-led mutiny. Monday, Macron said he didn’t share Melenchon’s vision of peace if it’s the “peace of Vladimir Putin.”

The gains made by Melenchon, who won about 11 percent in the first round in the 2012 elections, have come almost entirely at the expense of Hamon. That, pollsters say, could limit any further rise. In Ifop’s latest poll, Hamon was at 9.5 percent, down from about 13.5 percent before the first debate. The Socialist candidate has been hurt by the unpopularity of President Hollande.

“Melenchon has progressively grated away at Hamon, but there might not be that much more to grate away,” said Jerome Fourquet, director of opinion studies at Ifop. The combined polling scores of the two haven’t varied much over the past two months.

Jerome Jaffre, a researcher at Sciences Po’s Cevipof institute, said Melenchon will be held back if voters pay attention to his platform, rather than gravitate toward him because of his personality and Hamon’s poor campaign.

“He has to find 100 billion euros for his investments, he wants to raise taxes, he calls into question all European treaties, which in effect is calling Europe into question,” Jaffre said. “That’s not what most French want.”

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