French bond yields surge! Appeals court shortens Le Pen's election ban, 2027 French presidential election heats up again

French politics has reached a major turning point. On Tuesday local time, the French Court of Appeal ruled to significantly shorten the election ban for 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 ruling was announced, French government bond yields rose significantly, and the market began to reassess the future French political landscape and fiscal policy direction.

Paris Court of Appeal presiding judge Michèle Agi upheld the guilty verdict against Le Pen for misappropriating European Parliament funds, but significantly reduced the five-year election ban handed down in the first instance. The court held that the ban, imposed since March 31, 2025, has already "redressed the damage to the principle of integrity within the scope of protecting citizens' fundamental rights," and that continuing it would excessively restrict the freedom of candidacy, a fundamental principle of democratic elections.

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

Biggest Legal Obstacle Removed

This ruling means that Le Pen has regained the eligibility to run in the 2027 presidential election. However, there are still practical obstacles to her campaign prospects.

Le Pen had previously stated publicly that she might abandon her candidacy if she had to wear an electronic ankle bracelet during the campaign. Leaving the court, she made no comment to the media and planned to give a televised interview on Tuesday evening, where she is expected to formally state whether she will continue to pursue the presidency.

According to Bloomberg, after the ruling was announced, prediction markets slightly increased the probability of Le Pen winning, but Jordan Bardella remains the market's most favored presidential candidate for the National Rally.

Conviction Upheld, Court Explains Why Ban Was Shortened

The court found that Le Pen and several members of the National Rally had long misappropriated special European Parliament funds to pay salaries for party staff, with the conduct continuing for over 11 years and involving more than 2.8 million euros.

Among them, Le Pen was found to have improperly used approximately 474k euros between 2009 and 2016 while serving as a Member of the European Parliament to hire assistants, and to have encouraged other party lawmakers to adopt similar practices to ease the financial burden on the National Rally.

The dispute in the case centered on the fact that these assistants, although nominally employed by the European Parliament, were primarily engaged in French domestic party work rather than fulfilling their duties as assistants to MEPs. In the first instance, a total of 25 individuals and the National Rally party were convicted, though not all defendants appealed.

Regarding the shortening of the election ban, the court pointed out that at the time of the offense, French law did not require the imposition of a long-term campaign ban, and although the case benefited the National Rally as a whole, there was no situation where Le Pen personally sought private gain or profited from it.

Campaign Path Still Faces Real Challenges

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

Jean-Yves Camus, a French political historian and expert on the National Rally, said that wearing an electronic ankle bracelet typically means the person must remain at home at night, which would greatly limit a presidential candidate's intensive touring schedule.

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 requirements, making the entire campaign process "logistically extremely complex." Le Pen's lawyer, Rodolphe Bosselut, said the team welcomes the court's significant shortening of the election ban but still needs to study the full ruling before deciding whether to take further legal action.

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

2027 Presidential Election Heating Up Early

This ruling has effectively ignited the 2027 French presidential election ahead of schedule.

As the president of the National Rally, Jordan Bardella has long been viewed as the successor should Le Pen be unable to run. The 30-year-old young political figure has a different political image from Le Pen, who has built a broad voter base over three presidential campaigns.

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

For the market, Le Pen's regained eligibility means that uncertainties regarding France's future fiscal, EU policy, and political risks have reignited, serving as a key catalyst for the rise in French government bond yields after the ruling.

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