The two-month countdown to the French presidential election has ushered in an air of nervousness among investors who are worried about being wrong-footed by another populist upset in Europe.
The fact that Marine Le Pen, the candidate of the far-right National Front, is borrowing on familiar themes of putting France First and pledging to hold a referendum on EU membership is giving markets cause for concern.
But the tendency to draw parallels between Brexit, Donald Trump and Marine Le Pen is flawed. If the mood in corporate France is anything to go by, this time will be different.
“It can’t happen, and we’re confident it won’t happen.” That was the near unanimous reply of the CAC 40 bosses I spoke with during French earnings season when questioned about the risks of a Le Pen presidency.
While taking great pains not to mention any candidate by name, they signalled relief that polls put Le Pen’s odds of moving into the Elysee Palace at around 20 per cent.
This show of confidence is a far cry from the politically-correct neutrality we heard from corporate bosses in the United States and Britain ahead of votes last year.
That’s in part due to President Trump’s blue-collar pitch which, unlike Le Pen’s, came with a strong dose of financial reform and tax cuts. In the UK, meanwhile, business leaders debated the potential rewards of taking back control from Brussels.
Even where executives refrained from publicly supporting Brexit or Trump, it’s believed that so-called “closet-case” voters led the pollsters astray, both inside the C-suite and out.
In the wealthy suburbs of Detroit, for example, Michigan cocktail party-goers could be heard voicing disdain for Trump’s hard-line immigration rules and boasts about groping women, while in private admitting they voted for the candidate with a plan to cut their taxes.
You would be hard pressed to find any “closet case” voters outside the National Front’s base who think a Le Pen presidency would fatten their wallet.
If you still don’t trust the business elites or the polls, you should take comfort in France’s electoral system.
The two-round structure, which excludes third-party candidates from the final contest, provides a buffer against populist shocks.
That is why investors should look beyond the polls for the first round on 23 April (which Le Pen currently leads) and focus on round two where she trails both likely opponents, the Republicans’ Francois Fillon and the independent Emmanuel Macron, by a wide margin.
We’ve seen this show before. When Marine Le Pen’s own father, Jean-Marie Le Pen, advanced to the second round of presidential elections in 2002, he was defeated by Jacques Chirac. The Republican won support from opponents who crossed party lines simply to keep Le Pen out.
It’s anyone’s guess how a second round of voting would have changed the outcome of the EU referendum or the race to the White House, but it’s a reminder that comparisons aren’t always useful.
Investors who are betting on a populist Trifecta sweeping France this spring will find themselves on the wrong side of the trade.