Macron’s approval rating drop is a key change for France and the EU. According to a recent poll, conducted by IPSOS in early-September, the share of respondents that stated their support for President Emmanuel Macron dropped further, to 25%, down almost 10 points in a month, and down steadily this year and well below the peak of 66% in May 2017. Earlier surveys showed that the support for Macron is eroding among young voters under 35 years old, which was one of the two critical support groups that led to his victory. In our view, these developments are particularly interesting for France, as well as for the EU as a whole. We believe that, despite the huge financial asset buffers held by French corporates and households, France is likely to show growing vulnerability in the coming years to rising interest rates as, in our view, house price valuations are stretched and higher borrowing costs will weigh on the overall large indebtedness of companies. In addition, France is just at the beginning of the wage convergence process that is dominating in the EU: those countries that have wages above average are doomed to see them decline over time, while those that are below average could see a strongly favourable trend. This dynamic is likely to support the political parties perceived as more “extreme”, at the expense of Macron’s party, going forward. As the European elections, due in May 2019, approach, further weakness for Macron would be another problem area for the mainstream parties, already hit by overall weak support for Socialist parties in Europe, and lukewarm approval for the centre-right parties, including support for Germany’s CDU and Italy’s Forza Italia, which is still declining.