The recent elections in France and the UK have left both countries facing uncertain futures. In France, there is political gridlock as none of the three broad groupings that contested the election secured a majority. This lack of a clear majority makes it difficult for any party to implement their agenda [c48f8ecd].
In the UK, the Labour Party emerged victorious with a massive majority in the general election. However, the UK economy continues to struggle due to the combined impact of Brexit and the ongoing pandemic. Productivity in the UK has declined, and the country is burdened with a high public debt-to-GDP ratio and budget deficit [c48f8ecd].
Both France and the UK face financial constraints that limit their ability to pursue radical policy options. France, with its high budget deficit and debt-to-GDP ratio, must navigate these constraints while seeking a pragmatic deal between President Emmanuel Macron's Renaissance Party and the more moderate leftists [c48f8ecd].
The UK, on the other hand, requires more than incremental approaches to revive its economy. However, it is unlikely to receive the bold measures it needs. The combination of Brexit and the pandemic has left the UK in a precarious position, and it will require innovative and comprehensive strategies to overcome these challenges [c48f8ecd].
Seismic election upheavals in the UK and France have opened new avenues for both countries to deepen ties with Asia's emerging economies. The UK's Labour Party won a landslide victory, toppling the Conservatives after 14 years in power, and is now keen to engage with Asia's tiger economies. France's New Popular Front coalition secured the most seats in France's hung parliament, and the country is likely to engage with the Association of Southeast Asian Nations. Both countries are also looking to strengthen trade ties with India, with the UK aiming to finalize a free trade agreement that was stalled due to snap elections, and the EU negotiating a trade deal with India. The UK and France are also considering their trade dealings with China, with the EU recently raising tariffs on Chinese electric vehicles and both the EU and the UK facing pressure to investigate Chinese state subsidies on EVs. The UK is likely to adopt a more moderate economic stance on China compared to the previous government, while middle powers like the UK and France are expected to maintain a balanced approach to China due to the irreplaceability of key parts of China's supply chain. The UK's economic revival could be boosted by a trade deal with India, which is projected to become the world's third-largest economy. Southeast Asia as a whole is also positioned for long-term growth, attracting Western firms looking to diversify their supply chains. The EU and France are also actively pursuing economic partnerships in Asia, recognizing the importance of forging trade and business ties with the region's dynamic economies. The EU has been negotiating free trade agreements with Singapore and South Korea, while ASEAN has laid the groundwork for deeper economic integration with major partners. The India-UK trade deal is expected to serve as a template for the one between India and the EU, which could have implications for the export of services, particularly India's skilled IT workers [f5ebf7ce].