In Defeat, Le Pen May Upend French Reform

The National Front failed to gain control of any French region in elections on Dec. 13, yet even in defeat the anti-immigrant party could have an outsize influence over economic policy in the next few years. Stunned that the National Front got 6.8 million votes—exceeding its previous record of 6.4 million, set in 2012—mainstream parties are calling for urgent action to overcome the economic malaise that’s fueling public discontent. “There is no place for relief or triumphalism,” Socialist Prime Minister Manuel Valls said in a televised address on the evening of the vote. The government must “act more rapidly, to get more results,” he said. “This is our last chance,” said Xavier Bertrand, the center-right Republican who drew crossover Socialist support to defeat National Front leader Marine Le Pen in northern France.

Market-friendly Socialists such as Valls and Minister of Economy Emmanuel Macron have been in broad agreement with Republicans on key reforms to reduce France’s near-record 10.6 percent unemployment rate and boost growth and competitiveness. Their prescriptions include loosening labor rules to make it easier for employers to hire and fire, and nudging the long-term jobless off the dole by trimming their benefits. President François Hollande’s cabinet has been preparing for months to bring those and other measures to a parliamentary vote next year, a senior government official tells Bloomberg Businessweek.