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00:00MARK COLVIN It feels like a very political day after a very political weekend. What did the French primaries actually teach you that first we don't want people that have been in charge before and to you know the French are craving for some kind of reform we call them the French Thatcherite right. If you're a Brit probably not exactly. But for a French he's a Thatcherite right. It's been a it's been a very dynamic. We cannot least with Merkel's decision yesterday and of course that the primaries in France mean all of you Now Francine is feeling he's going to take the presidency right. That he will probably sweep up Sarkozy's votes in the second round 20 percent. I mean he came at 44 percent so six percentage points short of a majority . I think Sarkozy's voters are now likely to gravitate towards him meaning he will most likely face Le Pen in May. And I think in that context we also believe will likely win. So there is absolutely something of a backlash against the establishment . But in the case of film it looks as though that may not be the case. I mean he was prime minister to Sarkozy for a number of years. Right. And I'm going to give it if this is true if he does win or if he comes close to winning does it mean that to the French economy will be on a better footing again. He needs to deal with employment or unemployment the lack of employment . And he certainly needs to deal with more labour laws that make companies more flexible. Yeah. I think you know from our perspective looking at from a currency perspective first year politics is everything now politics is it any economics for us and clearly we've seen that this weekend now at the moment. I think it's very uncertain exactly what is going to happen whether fee on it does indeed win the next round of this primary when he then takes on Le Pen or not and how that works out. So at the moment you'd have a significant amount of uncertainty in Europe and therefore for the euro it's a negative for the time being. But if you have that strong view that you really think and feel the wind France will remain a core part of the eurozone exactly et cetera then you know it's really hard to see significant Euro downside from here. You know I look here at the difference between France and I find it telling right now that run that the Prime Minister may is speaking on the new capitalism she wants is there a new capitalism to France bring up the chart here I think we're going to go to Prime Minister may right now as she is still speaking there is a chart after Bloomberg. This is normalized U.S. In France nominal GDP over 35 years the white line is the US persistent in up in France with two bouts of simply not getting it done. Midge what kind of capitalism does the new France need. This is a this is a great question Tom I mean you're right that in the U.K. Theresa May has completely redefined the centre ground she's now appealing to that 52 percent which implies controls on immigration and continental style industrial policy Keynesian style deficit spending stuff. But even Jeremy Corbyn on the far left isn't even saying in the UK now I think in France as well . You're right it is a different type of capitalism. But it's again on economic reform further to the right more ambitious more bold the money than what either Hollande does you pay Sarkozy or vows were willing to commit to combined with a more conservative hawkish stance on things like social values and indeed foreign policy. That's I think the very particular make Rifi on his putting forward we're showing there of course the Prime Minister speaking in the United Kingdom at an event on yours taking questions it appears right now Sterling a little bit weaker off the speech but I don't want to overplay that right now. When I look at Jonathan Ferro his wonderful new book on France there's the idea of de Gaulle in the attitude of a France of another time and place. Is there a generational change that makes Paris and France more Anglo-Saxon. I know that's a loaded phrase in the hate mail is going to come in but is there a generational change right now with this defeat of Sarkozy. I think there is definitely a desire among large segments of the population for more ambitious economic reform . I mean Sarkozy was actually elected on that platform that was his mandate although he then delivered very little in Holland . I think in in of over the course of his presidency has actually done more I think Fillon is now playing to that segment of the population talking about things like reducing the size of the state potentially upending the 35 hour working week fiscal consolidation. This does sound like very Thatcherite type Anglo-Saxon economics. And I do think it's going to make him more competitive with right wing voters when he indeed faces off against Marine Le Pen in Maine .

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Rahman: French Election Most Likely Fillon vs. Le Pen

Mij Rahman, head of European research at Eurasia Group, and Dominic Bunning, senior FX strategist at HSBC, examine the 2017 French presidential election as former Prime Minister Francois Fillon won the first round of the Republican primary. They speak on "Bloomberg Surveillance." (Source: Bloomberg)

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