French bond yields soar! Appeals court shortens Le Pen’s ban from running, the 2027 French presidential election heats up again

French bond yields soar! Appeals court shortens Le Pen’s ban from running, the 2027 French presidential election heats up again

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French politics has reached a major turning point. On Tuesday local time, France's Court of Appeals ruled to significantly shorten the election ban of far-right leader Le Pen to the 15 months she has already served, clearing the biggest legal obstacle for her return to the 2027 French presidential election. After the verdict was announced, French government bond yields rose noticeably, as the market started to reassess the future political landscape and fiscal policy direction of France.

Michèle Agi, the presiding judge of the Paris Court of Appeals, upheld Le Pen's guilty verdict for misappropriating European Parliament funds, but significantly reduced the five-year election ban imposed in the first trial. The court stated that the ban, to be enforced starting March 31, 2025, had "adequately compensated for the damage to the principle of integrity within the scope of basic civic rights protection," and continuing to enforce it would excessively restrict the freedom of candidate eligibility, a fundamental principle of democratic elections.

Meanwhile, the court also reduced Le Pen's original two-year prison sentence to one year, which is expected to be served by wearing an electronic ankle bracelet rather than actual imprisonment.

This ruling means that Le Pen regains eligibility to participate in the 2027 presidential election. However, her prospects still face practical obstacles.

Le Pen previously stated publicly that if she had to wear an electronic ankle bracelet during the campaign, she might give up running. Upon leaving the courthouse, she did not comment to the media and plans to give a televised interview in the evening local time, where she is expected to formally announce whether she will continue to seek the presidency.

According to Bloomberg, after the verdict was released, prediction markets raised the probability of Le Pen's victory, though Jordan Bardella remains the most favored National Rally presidential candidate by the market.

Conviction maintained, court explains the shortened ban

The court found that Le Pen and several National Rally members had misappropriated funds from the European Parliament for party staff salaries over more than 11 years, involving more than €2.8 million.

Le Pen was found to have misused about €474,000 in hiring assistants while serving as a Member of the European Parliament from 2009 to 2016, and encouraged other party members to do the same to ease National Rally's financial burden.

The controversy centers on the fact that these assistants, though officially hired by the European Parliament, mainly worked on domestic party affairs in France rather than carrying out duties for MEP assistants. In the first trial, a total of 25 individuals and the National Rally party were found guilty, though not all defendants appealed.

Regarding the shortening of the election ban, the court noted that at the time of the incident, French law did not require the imposition of a long-term election ban. While the case benefited the National Rally as a whole, there was no evidence that Le Pen personally gained or lined her pockets.

The road to campaigning still faces real challenges

Although the legal obstacles have been largely removed, Le Pen still faces many practical difficulties in fully entering the national campaign.

French political historian and National Rally expert Jean-Yves Camus said that wearing an electronic ankle bracelet usually requires the individual to stay at home at night, greatly limiting a presidential candidate's ability to carry out intensive campaign tours.

He believes that if Le Pen decides to run, she will have to frequently apply for special permits to coordinate campaign activities with judicial supervision, making the whole campaign process "extremely complicated from a logistical point of view." Le Pen's lawyer Rodolphe Bosselut stated that the team welcomes the court's significant shortening of the election ban, but still needs to study the full verdict before deciding whether to take further legal action.

On the other hand, Patrick Maisonneuve, the lawyer representing the European Parliament, stated that if Le Pen ultimately gives up appealing to the Supreme Court, this case will officially become a final judgment, meaning she accepts the guilty verdict.

The 2027 presidential election heats up early

This verdict has in fact ignited the 2027 French presidential election ahead of time.

As the president of National Rally, Jordan Bardella has always been seen as Le Pen's successor if she was unable to run. This 30-year-old political figure has a different image from Le Pen, while Le Pen has accumulated a broad voter base through three presidential elections.

The latest polls show that regardless of whether Le Pen or Bardella represents National Rally, both are expected to rank among the top candidates in the first round of voting in the presidential election.

For the market, Le Pen regaining eligibility means renewed uncertainty for France’s fiscal, EU policies and political risks, and is also a key catalyst for the rise in French government bond yields following the verdict.

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