French political parties were rushing on Tuesday to find alliances - and trying not to fall apart - in a race against the clock to prepare for a snap election which opinion polls show Marine Le Pen's far-right party is likely to win.

The euro dropped as did French stocks and bonds after President Emmanuel Macron announced the lower house of parliament election for June 30 and July 7 following a massive loss for his camp in a European Parliament ballot on Sunday.

Rating agency Moody's warned of the risk that political instability triggered by the snap election meant for France's already challenging fiscal picture.

Le Pen's National Rally (RN) topped the first poll issued on Monday, although the survey said the party would fall short of an absolute majority of votes.

This means the RN was looking for allies to secure control of parliament, and some in mainstream parties tried to unite to keep the far-right out of power in the euro zone's second-largest economy.

A key target for both camps are the conservative Les Republicains (LR), in power for decades but now a shadow of its former self. It has already lost key members to Macron's centrist party and the far right. Some now fear it could implode.

RN president Jordan Bardella, who has already said he was trying to poach more LR members and could back some in the election, made his intentions clear.

"I'm calling on Les Republicains to stop being Emmanuel Macron's political crutch", he said on RTL radio. "If you have convictions, if you love your country...come and work alongside us."

On the other side, Edouard Philippe, a former LR member and previous prime minister for Macron, called on moderate forces, ranging from Socialists to conservatives, to join together.

"We have to accept the idea we need to work with others", Philippe told RTL. "Let's together build something in the country's interest".

But a decades-old consensus in France's political establishment to join forces to keep the far right from the gates of power, once rock-solid but already weakened over the past years, appeared increasingly fragile.

"Never with us!," Eric Ciotti, the head of the conservative Les Republicains (LR), said on X in response to Philippe's comments.

Le Figaro daily wrote that Ciotti was even open to local alliances with the RN in some constituencies - which some in the party immediately said was out of the question.

"It is unthinkable for me (and many LR MPs) that there could be the slightest agreement, the slightest alliance, even local, or personal, with the RN," Philippe Gosselin, an LR lawmaker, told Reuters. "I would stay in a party and a group that engages in such behaviour."



Meanwhile, France's divided left-wing parties pledged to work together and nominate joint candidates in the elections, but are yet to strike a formal deal.

In a joint release late on Monday the Socialists, Greens and the more hardline LFI (France Unbowed) and Communist parties vowed to "present an alternative to (President) Emmanuel Macron and fight against the racist project of the far right".

"There are moments in history one has no right to miss... there needs to be action, an electro shock, and a first step will be this union", Greens senator Yannick Jadot told France Inter radio.

Although the outcome of the ballot is hard to predict, a victory does not seem within reach for the left. They could, however, hope to weigh in on who will be named prime minister.

"The republican forces on one side, the extremist forces on the other are positioning themselves," a source close to Macron said, adding that the president would give a news conference on Wednesday afternoon.

The RN says it is not racist. It calls for protectionist "France first" economic policies and a radical cut in immigration. It would restrict childcare benefits to French citizens and withdraw residency for migrants who are out of work for more than a year.

It has also proposed higher public spending, despite already significant levels of French debt, threatening to further raise funding costs at banks.

Finance Minister Bruno Le Maire called on business leaders to help campaign against the far right.

"I'm appealing to the business world, I'm appealing to business leaders, artisans, shopkeepers, the self-employed", Le Maire said on BFM television.

"People have got to get their hands dirty, it's the most important election since 1958," he said, referring to the beginning of the fifth republic, considered the starting point of modern French politics. (Additional reporting by Michel Rose, Nicolas Delame, Blandine Henault and Sudip Kar-Gupta, writing by Ingrid Melander; Editing by Angus MacSwan)