The news rocked the French stock markets, prompting the worst sell-off in two years. High-profile victims included BNP Paribas and Soci\u00e9t\u00e9 G\u00e9n\u00e9rale. Roughly $258 billion was erased from France\u2019s market capitalization. Even the euro fell in response to Macron\u2019s plan.<\/p>\n
Those events have toppled Paris from its throne as Europe\u2019s biggest stock market, paving the way for London to take the helm on Monday for the first time in nearly two years.<\/p>\n
London Stock Exchange\u2019s market cap stands at $3.18 trillion, just slightly above Euronext Paris\u2019 at $3.13 trillion, Bloomberg<\/em> reported<\/a>. France\u2019s CAC 40 Index, comprising the stock market\u2019s biggest companies, has wiped out all its 2024 gains so far.\u00a0\u00a0<\/p>\n The U.K. could use the boost as it navigates a slowdown in IPOs and lingering macroeconomic uncertainties. The country once had a $1.5 trillion lead against the French capital in 2016, which has narrowed in recent years. The last time<\/a> the country lost its prestigious position as the leading stock market to France, it was amid eye-popping inflation of 10.7%<\/a> (now down to 2.3%) following political chaos under former Prime Minister Liz Truss.\u00a0<\/p>\n Hollie Adams\u2014Bloomberg\/Getty Images<\/p>\n<\/div>\n The news came as the LSE\u2019s CEO Julia Hoggett was named a Dame in the King\u2019s Birthday Honours list. Commenting on the recognition, Hogett said in a statement:<\/p>\n \u201cWhilst I recognise that this is an individual honour, I feel it is very much for the team of people at the London Stock Exchange who do such remarkable work to support the companies, investors and intermediaries in our markets.\u201d<\/p>\n The U.K. markets, rich with oil and mining companies, were more exposed to the volatility of economic forces during the pandemic. At the same time, Paris was gaining ground with the rise of luxury giants like LVMH and Herm\u00e8s owing to pandemic-fueled spending.<\/p>\n This confluence of events ultimately pushed London below Paris in its ranking as Europe\u2019s most valuable stock market\u2014until political chaos in France propped it back up again.\u00a0<\/p>\n The rivalry between the two financial centers has been long-running. For instance, London lost its top spot as home to the most Fortune Global 500<\/a> companies last year. Surprise, surprise: Paris rose to beat the British capital.\u00a0<\/p>\n London has also suffered other blows to its reputation as a business hub, with Cambridge-based semi-conductor company Arm Holdings choosing to list in New York instead. Still, IPO and merger activity are picking up, which helps bolster the LSE\u2019s position. Raspberry Pi, a personal computer company, recently launched its IPO and its shares soared over 50% in less than a week, making it one of London\u2019s best-performing tech listings in recent memory.\u00a0<\/p>\n At the recent European Parliamentary elections, the rise of the right-wing vote clearly indicated<\/a> the popularity of President Macron\u2019s competitor, Marine Le Pen, in France.<\/p>\n If Le Pen\u2019s eurosceptic National Rally (NR) party ascends to power, it could mean a broader shift in parliamentary power and French politics. For the markets, that means more expensive France-centric policies, driving up spending and national debt, which has been piling up<\/a> on a rickety financial system.\u00a0\u00a0\u00a0<\/p>\n As a result, French government bonds saw their risk premiums shoot up to the highest since 2017. The difference between these and the benchmark German bonds reflects the premium investors demand to hold French government bonds, given the risk attached to them.<\/p>\n Bruno Le Maire, France\u2019s Finance minister, warned last week<\/a> that the country \u201cwould face guaranteed economic collapse\u201d if parties on the extreme right or left rose to power. He also warned that if Le Pen is elected, France could face a Truss-style debt crisis<\/a>, sparked by a slew of proposed unfunded tax cuts that led to a bond sell-off in the U.K.<\/p>\n Whatever happens, France will have an eventful few weeks in the lead-up to the elections, due to be held on Jun. 30 and Jul. 7.\u00a0<\/p>\n<\/div>\n![\"julia](\"https:\/\/fortune.com\/img-assets\/wp-content\/uploads\/2024\/06\/GettyImages-1258960586-1-e1718623062371.jpg?w=1440&q=75\"\/)
France\u2019s political problem<\/strong><\/h2>\n