UPDATED: Macron fights to save his parliamentary majority and reform agenda

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PARIS, June 13 (Reuters) – President Emmanuel Macron could lose his outright majority in France’s parliament and the ability to push through his economic reform agenda with a free hand after a strong showing by a new left-wing alliance in the first round of voting.

Macron’s centrist alliance and the NUPES coalition led by the hardleft veteran Jean-Luc Melenchon each won 26% of the vote amid record abstentions on Sunday, though it is the June 19 second round alone that will determine the division of seats.

Elabe projected Macron’s Ensemble! alliance would win between 260-295 National Assembly seats – with the mark for an outright majority set at 289 seats – and that the left would secure 160-210 seats, a big increase from 2017.

“Come out and vote next Sunday to reject the evil politics of Mr Macron,” Melenchon tweeted after Sunday’s vote.

If Macron’s centrist alliance loses its outright majority in the run-off round, the president will be forced into making messy pacts with factions of the centre right or centre left who refuse to align with Melenchon on a bill-by-bill basis.

It could also trigger a cabinet reshuffle.

At stake is Macron’s ability to pass reforms including a contested pension reform that would see the French work longer, a change the former investment banker says is necessary to ensure long-term order to the public finances.

His opponents on the left are pushing to cut the pension age and launch a big spending drive as surging inflation drives the cost of living higher and erodes wages. Melenchon depicts Macron as an economic liberal who protects the rich and not hard-up households.

Prime Minister Elisabeth Borne defended the ruling party’s performance on Sunday.

“Contrary to the words of Mr Melenchon, who really has a problem with reality, we are the political force that has the most candidates in the second round, there are candidates from presidential majority in three-quarters of constituencies, and we will mobilise this week to win a clear and strong majority,” she told reporters in her Calvados constituency.

INVESTOR JITTERS

However, in a sign of investor unease at the prospect of Macron losing full control of the lower house, French banking stocks fell in Monday trading.

France’s third largest listed bank Societe Generale SOGN.PA had dropped 3.6% by 0850 GMT, underperforming the CAC40 index which was down 2.1%. Its two larger peers BNP Paribas BNPP.PA and Credit Agricole CAGR.PA lost 2.8% and 3.2% respectively.

“A nervy wait ahead of the second round,” Deutsche Bank wrote in a client briefing note.

No poll shows NUPES winning a ruling majority – a scenario that would plunge the euro zone’s second largest economy into an unstable period of cohabitation, where the president and prime minister come from different political groups.

Ensemble! won 25.75% of the popular vote while the NUPES bloc secured 25.66%, according to the Interior Ministry’s final tally.

Several Melenchon allies accused Interior Minister Gerald Darmanin of manipulating the count by not including some candidates who had publicly said they supported the left-wing alliance within the bloc’s tally.

The Interior Ministry did not immediately respond to a request for comment. Budget Minister Gabriel Attal said: “(The left) always call into question the figures … it’s their speciality.”

(Reporting by Tassilo Hummel; Additional reporting by Sudip Kar-Gupta, Elizabeth Pineau and Richard Lough; Writing by Richard Lough;Editing by Robert Birsel; Catherine Evans and Alison Williams)

epa1009299 France’s President Emmanuel Macron leaves the polling booth to casts his vote in the French parliamentary elections at a polling station in Le Touquet, northern France, 12 June 2022. The legislative elections in France will be held on 12 and 19 June 2022 to elect the 577 members for the National Assembly of the French Republic. EPA-EFE/LUDOVIC MARIN / POOL

A woman walks past legislative election posters in Paris, France. The legislative elections will be held on 12 and 19 June 2022 to elect the 577 members for the National Assembly of the French Republic EPA-EFE/MOHAMMED BADRA

Here are key facts about this election:

WHY ANOTHER FRENCH ELECTION?

French President Macron won a second mandate in April as France’s centrist, pro-European president. But that is not enough. He also needs to win a majority in the lower house of parliament this month to maintain full control over his reform agenda.

WHAT ARE THE POLLS FORECASTING?

Voter surveys had until recently shown Macron’s party and its allies – collectively known as Ensemble – winning an absolutely majority in the 577 seat parliament. But that outcome has becomes less certain in recent days.

Momentum is on the side of a left-wing coalition led by hard-left veteran Jean-Luc Melenchon. Melenchon is unlikely to win the 289 seats required for an absolute majority but may win enough to deprive Macron of the same.

WHY DOES THIS MATTER?

Falling short of an absolute majority would be a big setback for Macron. It would force him to broaden his alliance. The broader the alliance the more complicated deal-making, and dictating policy decisions, becomes.

A minority cabinet or coalition government would be an unusual scenario for modern-day France. The Fifth Republic was designed to avoid unwieldy coalitions.

If an opposition grouping were to surprise and win a majority, Macron would have to name a prime minister from the winning camp, ushering in a period of so-called cohabitation.

He would retain the lead on foreign policy but leave responsibility for most day-to-day policy matters to the government.

WHAT HAPPENS WHEN?

Voting takes place between 8 a.m. and 8 p.m. (0600-1800 GMT) on June 12. In constituencies where no candidate gets 50% of votes in the first round, a run-off vote is held on June 19, with every candidate who won the support of at least 12.5% of registered voters eligible to advance.

Polling for legislative elections is trickier than the presidential election as different dynamics on the ground make it harder to predict who will win nationwide.

WHAT DOES THE ELECTION LINE UP LOOK LIKE?

France’s two mainstream centre-left and centre-right parties dominated the French political landscape until Macron’s election 2017. Five years on both are still fighting for political relevance and the tectonic plates have shifted.

* Macron’s party and his allies run under the banner of the centrist Ensemble alliance.

* Melenchon has gathered the Socialist Party, Greens and Communists behind his own La France Insoumise (France Unbowed) party in an unexpected show of unity on the left.

His Nupes alliance is second in polls and did well in early voting among overseas voters.

* The conservatives, Les Republicains, are eyeing being the third biggest parliamentary group. Though they are forecast to be well behind Macron’s camp and the left, they could become kingmakers if Ensemble has the largest group but not an absolute majority.

* Marine Le Pen’s far-right Rassemblement National (National Rally) is polling third in terms of first-round votes, but fourth in terms of projected seats.

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