With both presidential and general elections coming up in April, May and June, France is on the verge of a complete political reshuffle.
The polls show French President Nicolas Sarkozy and his socialist challenger Francois Hollande racing neck-and-neck to victory in the first round of the presidential elections on April 22.
Both candidates have set out a raft of economic reforms to attract voters. But financial markets appear wary of a Hollande victory.
French banks in particular will be very sensitive to the outcome of the presidential elections due to two factors, Laurent Deydier, portfolio manager at Banque Jean-Philippe Hottinguer, told CNBC.com.
In the case of a Hollande victory, "French CDSs and OATs (the French long-term sovereign bonds) would be under pressure," Deydier said, as "there would be worries over the French government’s management of public funds, its capacity to reduce debt and the European treaty."
Francois Hollande has said he wants to renegotiate the EU fiscal pact that was agreed upon by 25 EU member states last year and is aimed at curbing excessive deficits.
The socialist candidate wants to separate the banks’ retail and investment banking activities.Page 1 of 3 | Next Page