| The world is understandably fixated on the upheaval in war and trade out of Donald Trump’s Washington. But this week was a reminder of a persistent source of political risk in the heart of Europe. Emmanuel Macron is said to be exploring the possibility of fresh elections in France, Bloomberg News reported Tuesday, barely a year after his abrupt decision to call a snap vote led to parliamentary gridlock and tanked what was left of his reform agenda. Macron says he doesn’t intend to dissolve parliament early. But Paris’s grinding political deadlock raises the question of whether an early election may be inevitable. His government has to find an extra €40 billion ($45 billion) in savings – a sum not far off the defense ministry’s entire budget – to meet next year’s deficit target of 4.6%. This is at a time when no party has a parliamentary majority and the economy is being hit by tariff fears.  The French National Assembly in Paris. Gridlock has stymied work in the chamber. Photographer: Nathan Laine/Bloomberg One factor is luxury, one of France’s most lucrative export sectors. It’s feeling the pain of tepid growth even before the bulk of tariffs hit. Kering SA, whose brands include Yves Saint Laurent to Balenciaga, reported that sales at Gucci fell 25% on a comparable basis in the first quarter. Macron’s challenge is already daunting, with France’s tax burden one of the highest in the industrial world and a debt pile among the top within the euro area relative to GDP. Credit rating agencies and bondholders are adding to the pressure, with S&P having placed France on negative outlook in February. It’s also unclear whether a fresh election would deliver a better result for Macron. His poll ratings have perked up in solidarity against Trump, but Marine Le Pen’s far-right National Rally is still out in front despite a court ruling banning her from standing for office, a decision that could be reviewed in 2026. Much depends on whether the center-left can be durably split from its more hardline allies – and on the public acceptance of deeper reform. For a Europe that’s gotten some of its mojo back, the risk speculation is a reminder that some of the region’s hardest choices remain. Francois Pinault, the founder of Kering SA, has seen his family’s fortune drop by more than two-thirds since a pandemic-era boom as his son struggles to turn around the French luxury conglomerate’s biggest brand, Gucci.  Francois-Henri Pinault Photographer: Benjamin Girette/Bloomberg Accor SA said Canada’s gaining traction as a tourist destination as travelers increasingly avoid the US for holidays. BNP Paribas SA is in talks with the ECB after the regulator opposed the application of a preferential capital treatment in its takeover of Axa SA’s investment unit. Louis Vuitton has increased the price of one of its most popular handbags in the US after the implementation of 10% tariffs on goods coming from the EU. France softened its approach to the trade clash with Trump as the country’s finance chief said he agreed with the US administration’s analysis of global commerce and called for a “win-win” transatlantic partnership. Private-sector activity in the euro area barely grew in April, with France and Germany missing expectations, as tariff uncertainty sent confidence in the services industry to an almost five-year low. Monday: Schneider Electric trading update Tuesday: Amundi, Capgemini trading update; L’Oreal AGM Wednesday: Societe Generale, Credit Agricole, TotalEnergies, Airbus trading update; preliminary April inflation data; March PPI and consumer spending data; preliminary Q1 GDP data Thursday: public holiday Purple is making a comeback as the color of royalty – watch royalty, that is – judging by a trend on show at LVMH Watch Week.  The Rolex Datejust 36. Source: Rolex | 
