PARIS Far-right leader Marine Le Pen will never be elected in France and financial markets are bound to lose a lot of money if they bet against French assets, Finance Minister Michel Sapin said on Tuesday.
Uncertainty about the outcome of the election, taking place in two rounds on April 23 and May 7, has this week driven the premium that investors demand for holding French over German government debt to its highest for almost four years.
Sapin, a French political veteran, said some investors didn't seem to understand the French electoral system, which he said would guarantee anyone facing Le Pen in May's runoff an easy victory with about 60 to 70 percent of votes.
"That's the reason why Marine Le Pen will never be elected in France," Sapin told Reuters and a group of European journalists.
Even though Le Pen looks certain to reach the head-to-head second round, all opinion polls show she will be soundly beaten by whoever she faces, with independent centrist Emmanuel Macron currently in pole position to defeat her.
Sapin said observers were wrong to draw parallels with Britain's decision to leave the European Union and Donald Trump's election in the United States, which had both caught markets off guard.
"Saying: 'since we were wrong once, wrong twice, we're wrong on Le Pen' is to not understand anything about France," Sapin said.
Referring to the rise in French borrowing costs in recent weeks on uncertainty regarding the French election, Sapin said:
"Those who, in good faith or by speculation, bet against France because they think Le Pen can win are not only wrong, but I'll be frank: they will lose a lot of money."
As finance minister in a previous Socialist government in the 1990s, Sapin had to fight market turmoil as investors tested France and Germany's resolve to keep the French franc in what was then the European Exchange Rate Mechanism (ERM).
"I was there in 1992 and in 93 (and) I made international investors who betted against the single currency lose money," he said.
"I don't know where the government bonds yield spread will be by April, maybe higher, but you'll have a very, very quick drop after the presidentials," he said.
(Reporting by Michel Rose; Editing by Richard Balmforth)