LONDON/BRUSSELS - Many of France's allies breathed a sigh of relief that the worst was averted as Marine Le Pen's far-right failed to win a snap election on Sunday but they noted that a messy coalition from a hung parliament could also pose headaches for Europe.

Le Pen's National Rally (RN) had been favourite to top the polls, raising the risk of France's first far-right government since World War Two and threatening to upend economic and foreign policy in the euro zone's second-largest economy.

In particular, Ukraine's allies feared a Le Pen-led government could be soft on Moscow and pare back military aid that Kyiv has relied on since the Russian invasion in 2022, though her party has latterly said Russia was a threat.

The National Rally's defeat signals at least a temporary pushback against a far-right surge in Europe, but could herald a period of instability with a new government in an uneasy "cohabitation" with President Emmanuel Macron.

"In Paris enthusiasm, in Moscow disappointment, in Kyiv relief. Enough to be happy in Warsaw," Polish Prime Minister Donald Tusk said on X.

Macron had called the snap poll in an attempt to wrest the initiative back from Le Pen but his own party was left trailing behind an alliance of leftist parties that performed far better than expected to take first place.

Several early reactions from overseas rejoiced that the immediate threat of a far-right government had been averted.

"The worst has been avoided," said Nils Schmid, the foreign policy spokesperson for Chancellor Olaf Scholz's Social Democrats in Germany, where the far-right has also surged in popularity during a cost of living crisis.

"The president is politically weakened, even if he retains a central role in view of the unclear majority situation. Forming a government will be complicated," Schmid told the Funke media group.

Spanish Prime Minister Pedro Sanchez's party congratulated the leftist alliance, called the New Popular Front, for a victory that "stops the far-right from reaching the government".

Nikos Androulakis, the head of Greece's Socialist PASOK party, said the French people had "raised a wall against the far right, racism and intolerance and guarded the timeless principles of the French Republic: Liberty, Equality and Fraternity."

Colombia's leftist firebrand President, Gustavo Petro, also congratulated the French for keeping out Le Pen.

"There are battles that last just a few days but (which) define humanity's fate. France has gone through one of these," he said.

An EU official, speaking on condition of anonymity, called it a "huge relief" but added: "what it means for Europe on a day to day basis remains to be seen though."

DEEP DIVISIONS

The election left the French parliament split between three large groups - the left, the centrists, and the far right - with different platforms and no tradition of working together.

The left wants to cap prices of essential goods like fuel and food, raise the minimum wage and the salaries of public sector workers, at a time when France's budget deficit is already at 5.5% of output, higher than EU rules permit.

"Bye-bye European deficit limits! (The government) will crash in no time. Poor France. It can console itself with (Kylian) Mbappé," said Claudio Borghi, senator from Italy's right-wing League party, referring to the French soccer star.

Other hard-right politicians expressed frustration.

Andre Ventura, leader of Portugal's far-right party Chega, called the result a "disaster for the economy, tragedy for immigration and bad for the fight against corruption".

A note by Capital Economics said France may have avoided the "worst possible outcomes" for investors, of an outright majority for either Le Pen or the leftists.

A fractious parliament means however it will be difficult for any government to pass the budget cuts that are necessary for France to comply with the EU's budget rules, it said.

"Meanwhile, the chance of France's government (and the governments of other countries) clashing with the EU over fiscal policy has increased now that the bloc's budget rules have been re-introduced," it said.

  - Reuters