June 25 Reuters For investors in France, a leftwing alliance could be a bigger risk than a farright leadership, some analysts say.

President Emmanuel Macron39;s shock decision to call parliamentary elections this month and Marine Le Pen39;s farright National Rally RN leading the polls have exacerbated concerns about France39;s fiscal sustainability.

The spread French debt pays over Germany surged and shares in French banks and companies slumped in the days after the election was announced. The selloff has eased but assets are far from recovering.

Spending plans by the leftist New Popular Front NFP alliance, which is polling second behind the RN, have added to those fiscal worries.

Some investors and analysts now say the risk that the NFP may perform better than expected in the second election round on July 7 due to tactical voting, and even form part of a new government, may be a bigger worry for financial markets.

The worst outcome for the market would be if the left wing would get in with the majority… that39;s the tail risk, said Gareth Hill, a portfolio manager at Royal London Asset Management.

The NFP wants to progressively ramp up spending to an extra 150 billion euros 160.44 billion annually by 2027 to cover policies ranging from a 10 civil servant pay rise this year to cutting the retirement age to 60 from 64 currently.

It says the spending would be fully offset by hikes on taxes ranging from inheritance to wealth and multinational corporations.

While…