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Don't rule out a President Le Pen

Feeble field of candidates could be harbinger of financial turbulance

There appears to be a consensus view that Marine Le Pen, the candidate of the far-right Front National, will advance to a second-round run-off before losing by a wide margin to a more mainstream opponent. That's what happened to her father in 2002.

Not so fast. Le Pen has a real chance to become France's next president. If she does, she might do much more damage to France's economy and its role in Europe than even she intends.

Her odds of winning -- the first round of voting is on April 23 -- are better than most think. First, Le Pen is part of a deeply flawed field of candidates. Benoit Hamon and Jean-Luc Melenchon have divided voters on the left. Francois Fillon, the candidate of the center-right Les Republicains, has been badly damaged by corruption charges. Centrist candidate Emmanuel Macron has not yet been tested and has no reliable support base.

Le Pen might not have majority support, but her voters seem much more motivated than those of any of her rivals. In November, Donald Trump won support from only 26% of eligible U.S. voters. Given lukewarm support for Hillary Clinton and the decision by millions of Americans to stay home, Trump's passionate 26% proved enough for victory.

In addition, as with Trump and those who fought for Brexit, Le Pen has already shown great skill at speaking directly to the anxieties of millions of voters worried about jobs, economic stagnation, immigration and security. On all these issues, headlines between now and election day are more likely to boost Le Pen than any of her opponents, particularly if another terrorist attack takes place in the heart of Europe or if there is more violence between French police and angry young people living in the banlieues on the outskirts of French cities.

Macron, Le Pen's likeliest second-round opponent, may see support erode among center-right voters as Le Pen uses Macron's role in the deeply unpopular Francois Hollande government against him. He is vulnerable in other areas, as well. Macron has yet to face the sort of scandals that have plagued Francois Fillon, and the scrutiny that comes with them, but that might change. Just as Hillary Clinton faced embarrassing leaks of uncertain origin, so Macron might face similar challenges. It's also possible that support for his candidacy will decline sooner, and that the deeply flawed Fillon will advance to the second round, which would be held May 7. In this case, it might well be voters on the left who decide to stay home.

If Le Pen pulls off the upset, the damage she inflicts on France's economy and its place in Europe might not come through political means. She can't hold a referendum on France's EU or euro membership, because Article 11 of France's constitution only allows for referendums on questions that do not require constitutional change. Article 88 enshrines France's place in the European Union. Nor will her party elect enough members in June's legislative elections to form a Front National government. Forced to form a government with another party, probably from the center right, Le Pen will have almost no leverage on domestic policy -- particularly on any move to alter the constitution to leave the EU or eurozone.

Yet, if she wins, the uncertainty and unrest that would follow might well send shock waves through financial markets. If global reserve managers, who probably hold 700 billion euros ($747.2 billion) of French government debt, decide to sell on a large scale, they might overwhelm the ability of the European Central Bank's quantitative easing to offset the move, triggering a sharp spike in French government bond yields. In such an event, it's unclear where relief might come from.

If ratings agencies decide any attempt to redenominate French debt -- as Le Pen has promised to do -- constitutes default, a crisis of confidence in France's four "global systemically important banks" could ensue and set off a run on all French banks. In this scenario, we might also see capital flight as French depositors and investors try to move assets outside the country.

We can't predict how a President Le Pen would respond to these pressures. She might not know, either. But an emergency that forces an uncoordinated exit from the eurozone would create chaos -- for France, for Europe, and beyond.

Ian Bremmer is the president of Eurasia Group and author of "Superpower: Three Choices for America's Role in the World." He is on Twitter as @ianbremmer and Facebook as Ian Bremmer.

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