What a Victory for France’s Marine Le Pen Would Mean for European Startups

As France heads into its presidential elections this weekend, European entrepreneurs are girding for a major upset.

On the heels of President Trump’s surprise victory in the U.S., the far-right French candidate Marine Le Pen has seen a surge in opinion polls. That has French entrepreneurs nervous. A Le Pen presidency could lead to slower or even tepid growth among French businesses–and may well hold implications for startups across Europe.

“The French have been dispossessed of their patriotism,” the candidate told supporters at a February rally in Lyon. “They are suffering in silence from not being allowed to love their country.”

Marine Le Pen has vowed to increase domestic spending and bring business back to France.

CREDIT: Vincent Jarousseau

Like Trump, Le Pen has vowed to cut taxes for small businesses, reduce regulation, and increase domestic spending. The National Front party candidate has promised to protect French businesses against foreign competitors by, for instance, giving them priority when bidding for public contracts.

She has also moved to limit immigration by stripping dual nationals of their French citizenship, cutting migration to 10,000 per year, and putting thousands more police officers on the streets. Most notably, she has proposed holding a referendum to remove France from the European Union. This so-called “Frexit” could limit French companies’ access to euro zone customers. It would also return the country to an independent currency.

Naturally, the stakes are high for French companies that could be looking at higher trade costs, along with additional bureaucratic hurdles. “If France voted to exit the E.U., it would totally turn things upside down,” says Geoffrey Heal, a professor of social enterprise at Columbia Business School, who has been following the impact of Brexit on small businesses. He adds that global companies that do business in France–car manufacturers such as Nissan, for instance–or those that import products over the border would certainly see an impact to their bottom lines.

Polls are predicting a tight race, with analysts suggesting that Le Pen will win the first round of voting. While she’s expected to lose to the more moderate Emmanuel Macron in a run-off, a Le Pen victory is certainly plausible. Here is just a sampling of how she might change the face of business in the E.U.

Limiting immigration

For Julien Verdier, the founder and CEO of the Paris-based advertising firm Adyoulike, Le Pen’s improvement in the polls is troubling. Although the entrepreneur doesn’t expect that Le Pen will win the run-off, he says that the consequences of a far-right Presidency would be detrimental to companies like his. Indeed, he notes some clients are investing less in advertising ahead of the election. The startup, which works with companies such as Barclays, Microsoft and Dior, brought in €9.7 million ($10.5 million) in 2015 sales, landing the Inc. 5000 Europe list at No. 378 this year.

“It would be horrible for us [if she won,]” he says. “We would lose talent and investments,” he says, referring to Le Pen’s calls for preventing certain immigrants from living and working in France.

Leaving the E.U.

CREDIT: Courtesy Le Petit Ballon

Similarly, Clément Thibault, the co-founder and general director of the Paris-based wine subscription service, Le Petit Ballon, is worried about Le Pen’s rise. Specifically, he is anxious over Le Pen’s calls for France to leave the E.U. When Britain voted to leave the union last June, the value of the pound sank, causing some businesses with international operations to lose sales. Because Le Petit Ballon operates in four countries, Thibault is concerned about what could happen to the value of France’s currency–that is, if the country returns to the franc. His seven-year-old business did €4.7 million ($5.1 million) in 2015 revenue. It charges customers €20 ($21.50) a month to introduce them to inexpensive wines.

“It’s very difficult for us to run a business [if] the currency changes,” says Thibault. “We sell alcohol, which is a product that does not trade freely in Europe. We know the complexity of the borders, and in each country we do business, we must pay different taxes. For us to have a Frexit would complicate things even more,” he says.

Reducing regulations

“The National Front gets support from very small businesses–artisans and local retailers,” says Vincent Jarousseau, a professional photographer and the author of a book on the National Front, called L’illusion National. He notes that the party’s program of increasing calls to buy French–and reduce regulations–is attractive to those who’ve grown frustrated with the administrative burden of starting up locally, and the benefits that foreign businesses seem to have reaped.

Le Pen has attracted support from artisans and small business owners in rural areas.

CREDIT: Vincent Jarousseau

French farmers, in particular, say they’re encouraged by Le Pen’s calls to reduce red tape. Bertrand Hourdel, who employs five workers at his Brittany pig plant, says he’s tired of losing business to European competitors. “The E.U. has tied us up in a straitjacket of regulations so we can’t compete with other member states like Spain, where the same regulations don’t apply,” Hourdel recently told The Telegraph. “The only candidate who’s talking about confronting this situation head-on, really changing it, is Marine Le Pen. “

Other entrepreneurs are similarly emboldened by Le Pen’s vow to bring business back to France. The National Front in 2014 set up a collective of young entrepreneurs, the Collectif Audace, who say they’re encouraged by the candidate’s “France first” economic program. Over Twitter, the group’s president, François de Voyer, recently condemned Uber for allegedly avoiding taxes in France: “The anti model! In France, their profitability is up 40 percent, but they still don’t pay taxes. With Marine Le Pen, end of the impunity!”

Embracing change

Even if Le Pen wins, she’d likely have less freedom to act than President Trump, who has signed a number of executive orders calling for sweeping changes. “She’d still face a socialist majority in the parliament,” explains Columbia Business School’s Heal. “It would be like a Republican President in the U.S. facing a Democratic control of Congress.” At present, the National Front holds just two seats in the French parliament, out of 925.

Even so, many entrepreneurs agree that France faces systemic issues that make it difficult to start a business. “France is a country that doesn’t have the best image in terms of competition and business,” notes Adyoulike’s Verdier. He attributes this to a sluggish economy, and to the historically socialist government that imposes large taxes on businesses and individuals for the sake of subsidizing health care and education. “I’m always happy to come back to the U.S.,” says Verdier, who for most of the year runs his company from New York City. The entrepreneur recently celebrated the birth of his daughter in the Big Apple too.