The Franco-German alliance that forms the bedrock of the European Union is under threat from growing French nationalism.
As France’s Prime Minister Bernard Cazeneuve comes to Berlin Monday to meet with Angela Merkel, two leading contenders for the French presidency, Emmanuel Macron and Francois Fillon, have warned that their populist rival, Marine Le Pen, poses a serious threat to the future of the euro zone.
“We have to take the threat seriously because the parties of lies and nationalism are advancing everywhere in Europe,” Mr. Macron, a former socialist who’s running as an independent, told Handelsblatt.
Indeed, France’s cost of borrowing has risen precipitously in recent days as investors price the risk that Ms. Le Pen could win the French presidency amid campaign turmoil.
The presidential race has been upended as scandal engulfs conservative candidate Francois Fillon, who was once considered the hands-down favorite to win the election.
Mr. Fillon stands accused of using public money to pay family members for jobs they didn’t actually perform. A majority of French voters now want Mr. Fillon to drop out of the race.
Investors are concerned that Ms. Le Pen now has opening to win the race as Mr. Fillon’s campaign falters.
Ms. Le Pen has said she would withdraw France from the euro zone and hold a referendum on its E.U. membership. Mr. Fillon warned that Europeans shouldn’t take the euro for granted.
“The euro is a great success of European unity, it secures low interest rates for us, but it would be dangerous to view it as an unshakable achievement,” Mr. Fillon told Handelsblatt.
Recent polls show Mr. Macron, who previously served as France’s economics minster, facing off against Ms. Le Pen in the second-round vote and defeating her by double digits. The 39-year-old, who has never held elected office, said that while the threat from Ms. Le Pen was real, markets were overreacting.
“The markets didn’t see Brexit and Trump’s victory coming and now they want to be quicker than the next eruption,” Mr. Macron said.
France’s finance minister, Michel Sapin also spoke to Handelsblatt, warning that investors were betting on the wrong horse.
“I say it very clearly: All the people who are betting, whether out of conviction or speculation, that France will leave the euro because Marine Le Pen could win are going to lose a lot of money,” Mr. Sapin said.