RN protests add to Macron’s political gamble

France’s election campaign kicked off in earnest Monday following a weekend of violent nationwide protests against the far-right National Rally, or RN, whose record European Parliament gains sparked the snap vote.

Hundreds of thousands of demonstrators took to the streets on Saturday to protest against the rising nationalist sentiment espoused by party figurehead Marine Le Pen and her 28-year-old protege, RN President Jordan Bardella.

Around 250,000 people marched in Paris and other cities across the country after labor unions and rights groups called for protests, according to police estimates cited by France’s Le Monde newspaper. The CGT trade union told CNBC it counted 640,000 protesters nationwide on Saturday.

The unrest, which saw police deploy tear gas against some protesters, adds to a week of turmoil in France after President Emmanuel Macron’s bombshell decision to dissolve parliament following steep losses for his Renaissance party in the European Union elections.

National Rally is currently leading in the polls with 35%, with less than two weeks to go until the first round of voting on June 30. The left-wing New Popular Front is in second place at 26%, while Macron’s Renaissance is currently third at 18%, with a second round of voting due July 7.

A far-right majority would mark “unchartered territory” for France, with “major downside risks,” Mujtaba Rahman, Eurasia Group’s managing director for Europe, told CNBC.

More likely, however, is a “messy” hung parliament, he said — part of Macron’s gamble to discredit RN’s legitimacy ahead of the 2027 presidential elections.

“That’s probably Macron’s bet, that there will be no clear majority, parliament will remain a mess, and Macron will be able to point to the mess as an indication and a caution to voters that they need to be a lot more careful when thinking about the 2027 presidential election,” Mujtaba said in a phone interview.

Nevertheless, markets have been roiled by the uncertainty, with the French CAC 40 losing more than 6.2% last week to record its worst weekly loss since March 2022.

French stocks gained on Monday, with Goldman Sachs’ senior European strategist Sharon Bell saying that the sell-off may have been premature.

“I do think it’s been a bit of a knee-jerk reaction to sell off all French stocks,” Bell told CNBC’s “Squawk Box Europe” on Monday. “We would argue that the ones that are most vulnerable are small caps and domestic French names.”

Still, some analysts said the volatility was set to remain in the runup to the election.

“Until there is more clarity, in particular regarding the different parties fiscal and spending plans, uncertainty is likely to linger,” Societe Generale wrote in a note Monday.

“Suffice to say that this uncertainty will be with us until at least the second round of the election on July 7th and likely beyond,” Deutsche Bank added in a separate note.