One striking aspect of the UK election campaign thus far has been the lack of reaction from the financial markets, even in the face of Labour's apparent overwhelming majority. How different from the situation in France, where French bond yields increased and the share market dropped by about five percent following President Emmanuel Macron's unexpected announcement of legislative elections. 

To some extent, this contrast is because of the surprise element. Macron’s announcement of an impending two-round election this Sunday and on 7 July came as a complete bombshell and the result is uncertain. Mind you, Rishi Sunak’s announcement that the UK election would be held on 4 July also came as a surprise. But this only advanced the election by three or four months from what people had generally assumed and, whatever the date, majority opinion in the financial markets had pretty much taken a clear Labour victory for granted. 

There are some important differences between the two countries with regard to what a new government might do. Here, the Labour Party has fallen over itself to appear fiscally responsible. There are clear echoes of Tony Blair’s New Labour which, after the 1997 victory, initially stuck to the previous Conservative government’s spending and borrowing plans. 

The recent Truss/Kwarteng episode must surely have had a major impact on Labour thinking. Once in power, Labour would surely be keen to avoid anything that seriously upset the financial markets.

French politics is a completely different kettle of fish. On either side of Macron’s centrist, technocratic party lie parties with a radical economic agenda and an apparent insouciance about increases in the fiscal deficit. 

As it is, the French fiscal position looks even more perilous than ours, with a public deficit last year of 5.5pc of GDP and a ratio of public debt to GDP of about 111pc. The comparable figures for the UK are 4.5pc and 98pc. 

Already, the EU is rattled about French fiscal policy. Even if the current government, or some reincarnation of it, were to remain in power it is very difficult to see France reducing its deficit to the planned level of 3pc of GDP by 2027.

Marine Le Pen’s party, National Rally, or RN, is frequently referred to as Right-wing. Yet the terms Left-wing and Right-wing are misleading. The party is certainly nationalistic and eurosceptic, but many of its economic policies are socialist. It is not remotely Thatcherite. It inclines towards protectionism and heavy state intervention in the economy. 

In the 2022 presidential elections, which Le Pen lost to Macron, the party proposed radical reductions in the rate of VAT on energy, exempting the under-30s from income tax and allowing many workers to retire at the age of 60. It may well moderate its position during this election campaign and if it were to form a government, then it might be much more pragmatic than it seems at present, mirroring the example of Georgia Meloni in Italy. 

Remarkably, on the “Left”, the Nouveau Front Populaire (NFP) appears to be even more fiscally irresponsible. 

In fact, what could rattle the markets just as much as the prospect of either of these two groups forming a government is the danger of parliamentary deadlock, with no party or group of parties being able to form an effective government. Moreover, in these circumstances, President Macron might even resign. That would run the risk of bringing forward the prospect of Le Pen becoming president from 2027 to this year.

These disturbances in French markets have already rippled out to other members of the eurozone with spreads between those countries’ 10-year bonds and the German equivalent widening significantly. Of course, we have been here before and the EU has a habit of wading through such crises. At the moment, what has happened in France counts as a comparatively minor crisis compared to the events of 2012 concerning Greece, and even the sell-off in bond markets as a result of a planned fiscal expansion in Italy in 2018. 

At the very least, though, the prospect of a Le Pen presidency should give the markets pause for thought. Although she has dropped her advocacy of France leaving the euro and staging a referendum on France’s continued EU membership, she remains distinctly eurosceptic. If she wins, this would mean that further moves towards European integration would not proceed and the so-called Franco-German motor, which has driven the EU since the beginning, will have stalled, if not been taken off the road altogether.

One of the consequences of the turmoil in French politics and various other European countries, combined with the acrimonious and divisive run up to the election in America, is that if Labour wins by a large majority on 4 July, the UK may come to be seen as a haven of relative stability. Not only would such a government be able to govern effectively but one of the definite doubts and dangers hovering over the UK scene for over a decade, namely the possible secession of Scotland from the union, would surely have faded, perhaps to the point of disappearing altogether. 

Who would have thought it? It is not that we don’t have political turmoil here. We certainly do, and we are going to have lots more of it. If the polls are even roughly correct, then there is surely going to be a battle royal within the Conservative Party about the future direction of policy and the relationship between Conservatives and the Reform UK Party. Meanwhile, the sharp differences of opinion within the Labour Party that have so far largely been suppressed for electoral reasons, will break out into the open. 

But neither of these internal struggles will impede the business of government or lead to serious violence, let alone revolution. The same cannot be said with any confidence about the situation across the channel.