This was playing out against a backdrop of destabilizing events
that once seemed impossible — the election of Donald J. Trump in the United States and the vote to abandon the European Union in Britain, also known as “Brexit.”
Le Pen had moderated her positions in recent weeks as her election has gained plausibility,
her hostility for the European Union and the euro are well known.
The manic swings of the markets — first spooked by the possibility of a Le Pen presidency, then ecstatic over the apparent unraveling of
that possibility — attest to the gnawing fear that the euro could still succumb to whatever blow history delivers next.
Her strength in polls in recent weeks prompted investors to demand greater returns on French government debt, a sign
that the odds of default — however minute — were multiplying.
A Le Pen presidency could spook them into unloading some of it, increasing borrowing costs for the French government and the business world.
The French Parliament and Constitution would severely constrain a President Le Pen.
But the threatened act of redenominating French debt would almost certainly lead to a downgrade of France’s credit rating, bringing severe
market consequences, said Mujtaba Rahman, managing director for Europe at the Eurasia Group, a risk consultancy based in London.
