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And it appears it is pricing in a potential Front National Marine Le Pen victory which is having a knock-on effect on German bonds. German short-dated government bond yields fell to record lows on Friday, recording their biggest weekly drop since 2011. While polls currently see Mrs Le Pen, 48, gaining ground on her opponents in her bid to become the first female French president, she is forecast to lose the run-off vote. The German drops contrasted a rise in yields for French government bonds after polls said surveys indicated that Le Pen could poll as high as 40% in the second round of Presidential elections.

GETTY Angela Merkel and Marine Le Pen are at opposite sides of the spectrum

Treaty changes are in my view not on the agenda Angela Merkel

However market reaction appears not to support the idea that Mrs Le Pen will lose. "The short end of the German yield curve is now completely independent from all the macro moves, ECB policy and doesn't really correlate with the long end of the curve either," said Peter Schaffrik, head of European rates strategy at RBC Capital Markets. Patrick O’Donnell, an investor at Aberdeen Asset Management said: “People are sitting up and watching (France) more now. “They’ve gotten Brexit wrong, they got Trump wrong. They don’t want to be getting another big political risk wrong.” While the German bond yields are good news for the domestic economy, they indicate that Mrs Merkel's policies are way off the mark and that her support of the EU is being questioned by investors. Should Le Pen win and break up the single currency, investors expect German financial assets to perform better than others in Europe. “If redenomination risk were to reappear, then the short-dated maturities of France and Spain would be the ones that would come under pressure,” Mr O’Donnell said.

Added to the woes of the currency are claims the European Central Bank is failing in the supervisory role governing Europe's distressed banks. With the potential of a Greece default, an Italian bail out and warnings from Spanish economists who say the country is in the grip of financial ruin after they were given "crazy" loans they can't pay back - things are not looking healthy for the euro. On Thursday Mrs Merkel ruled out any new treaties that would allow European countries to share each others’ debt burdens.

GETTY Mrs Le Pen is growing more confident by the day

The comments apparently show Mrs Merkel is also preparing for the worst as rumours grow around the future viability of the European currency. Only last week Mrs Merkel hinted that she believed that Germany's former currency the Deutsche Mark was more valuable than the current Euro. However her comments regarding the demands for shared debt were fundamentally clear.

She said: "I see no change in our position that ... a mutualisation (of debt) cannot take place without moving competencies first to Europe. "Treaty changes are in my view not on the agenda." In France, Mrs Le Pen's strategy on Europe could be working on the electorate in a society more and more concerned about the EU. Almost 12 years ago 10 countries in the European Union decided they would allow the public to go to the ballot box to decide whether they would support the EU constitution. But after France and the Netherlands voted overwhelmingly to remove themselves from the bloc's constitution, six other countries cancelled their referendums.

And France and the Netherlands simply ignored the will of their people after they overwhelmingly rejected Brussels. The crunch vote on the EU in both countries sent shockwaves through the establishment – prompting the UK, Portugal, Poland, Denmark, Ireland and the Czech Republic to cancel their votes. In France almost 55 per cent of people voted No with 45 per cent in favour, with a turnout of 70 per cent. The result in France was described as a "political earthquake" that would shake the foundations of the EU administration to its core.

GETTY Merkel was forced to rule out a debt sharing programme

French Prime Minister Jean-Pierre Raffarin was quickly replaced by Dominique de Villepin and Nicolas Sarkozy became Minister of the Interior. Sarkozy was then later elected as President of the French Republic in May 2007 and organised a renegotiation and ratification without a referendum, leaving the public furious. Eventually he brought the Lisbon Treaty to Parliament, against the wishes of the 15,449,508 people who voted no, and pushed the treaty through instead. Now analyst Paresh Davdra, CEO and Co-Founder of RationalFX, says the euro could well be on its way to becoming an irrelevance. “The pound-euro rates have shown consistency this week, with the pound remaining strong throughout – buying 1.189 euro at its highest and 1.183 on Thursday.

Topless protester blasts Marine Le Pen Fri, February 24, 2017 A topless protester burst into a hall where French presidential candidate Marine Le Pen was delivering a foreign policy speech chanting 'Marine, pretend feminist' Play slideshow Getty Images 1 of 9 Marine Le Pen gestures after a press conference focused on the theme 'France's international policy in a multipolar world'