WHAT A FRONT NATIONAL VICTORY WOULD MEAN FOR THE EU

In the short term, a National Front win would throw the European Union into a deep crisis. A victory for Ms. Le Pen, coming after Brexit would underscore that Europeans have now arrived to a third phase: active rebellion.

A Le Pen presidency could spell the demise of the euro and a further unravelling of the union. Crisis on multiple fronts- the re-emerging financial crisis in Greece, a creaking Italian banking sector, the prospect of more refugees arriving now that winter has passed and Brexit are already dangerous stress on the Union. Although growth is slowly returning to the eurozone, a French withdrawal on the orders of Le Pen could still deliver the ceuro a fatal blow.

Ms. Le Pen plans to renegotiate the terms of France's membership in the Union, talks that conceivably would coincide with the already fraught Brexit negotiations. Ms. Le Pen will demand a return of full national sovereignty, including monetary independence, fiscal and financial autonomy. French euro assets and debt would be redenominated in a new currency on a 'one franc to one euro' basis, and competitive devaluations would be undertaken. A newly independent Bank of France would buy French government bonds in the secondary market and suppress yields. 

Investors would sell off French assets, markets would fall, and the eurozone recovery itself could falter. Ordinary French savers, worried about the risk of devaluation from a return to the franc, would rush to withdraw their euros for fear of capital controls being imposed, as they were on Greece. A major run on the euro, and capital flight spreading across the continent, would destabilize the currency union as markets began to anticipate its dissolution.

About the Referendum

Ms. Le Pen would in her first year in office as President conduct a referendum on whether France should leave the European Union altogether: Frexit. But France has a written constitution that states that 'the Republic is part of the European Union'. So a Frexit would require a constitutional change. 

Under Article 89, any constitutional change needs to be proposed by the government, not the President. Then it has to be approved by both the upper and lower houses and then either by public vote in a referendum or by a majority of 60 percent of Congress. This means that, if Ms. Le Pen wanted to call a referendum, a President Le Pen would need a majority in the June legislative elections. The FN needs to win 289 out of 577 parliamentary seats in June for a majority, up from two at the moment. The party has only two seats in the 348-seat Senate, where elections for half of the Chamber are due in September. A Le Pen presidency without a majority in the house would be unlikely to result in a referendum on the EU.

Ms. Le Pen unilaterally could use the Article 11 of the French constitution and call for a referendum although in theory- such a vote cannot change the constitution. In 1962, however, Charles de Gaulle succeeded in changing the constitution after invoking a referendum under Article 11. Senior FN officials have said that Ms. Le Pen would try to do the same thing. But Article 11 has since been modified by Article 61, requiring a sign-off by the constitutional court before a vote takes place. Ms Le Pen would find hereself in fron of the French constitutional courts if she tried to use Article 11.  The courts would be likely to block such an action.

Even if Ms. Le Pen could organize a vote, polls suggest that the French people do not want to leave the euro. Recently, Ms. Le Pen has suggested a 'common currency', similar in structure to the European Currency Unit, or Ecu that preceded the euro that would exist in parallel with the franc. However, this would still be tantamount to the end of the monetary union. Some analysts think financial markets will go into a tailspin if Ms Le Pen is elected, regardless of the nuances of French constitutional law. If she wins the markets will go into a panic mode, prompting an 'existential crisis' for the EU and potential 'leakage of liquidity' from the banks. If she lost a referendum, Ms. Le Pen has said she would resign. Leaving the euro is central to her economic policy. She argues that a devalued franc would restore the competitiveness of French workers.