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STORY: Marine Le Pen's National Rally (RN) had been favorite to top the polls in the French parliamentary elections.

Her party's defeat signals at least a temporary pushback against a far-right surge in Europe.

But the result also heralds a period of difficult negotiations and political instability for the euro zone's second largest economy, according to Reuters Paris bureau chief Richard Lough.

:: What does the result mean?

"I think what this means is that we're facing a prolonged period of political uncertainty that could mean policy paralysis in the coming months, perhaps even the next year. The Fifth (Republic) Constitution says that the president cannot dissolve Parliament or Parliament can not be dissolved by a vote of no confidence for 12 months after a parliamentary election. So we're stuck with this configuration in Parliament for the next 12 months. If there is political deadlock in the negotiations there will be policy deadlock in Parliament."

:: How will France form a new government?

:: "By convention, under the Fifth Republic, the president has gone to the bloc with the largest number of seats in the lower house, to pick a prime minister. But he doesn't have to do that and the expectation now is that he will wait a few days to see how things shake out. There is the possibility that we could see some forces from the leftist alliance seek to build a coalition with some forces from Macron's own centrist camp and if they can go to Macron and say 'We can build a broad coalition which will carry an absolute majority', then Macron would be entitled to go to that new alliance rather than the New Popular Front left-wing block and pick a prime minister from there."

:: What does this result mean for the far-right?

:: "It will be a huge disappointment for the far right. They've seen something of a remarkable ascendancy in France and this has mirrored also the rise of populism...across Europe. They had a real shot at power. We see that the strategy that was led by the centrist alliance and the left-wing alliance who agreed to work together to pull candidates from constituencies where there was a three-way vote in order to create an anti-RN vote, that strategy worked. They still have more lawmakers in Parliament than they have ever had but it will surely be a disappointment."

:: Did Macron’s decision to call an election pay off?

"So Macron emerges from this parliamentary election undoubtedly weakened. His authority has been severely dented. When he came to power in 2017 he had a massive majority in the Parliament and basically all things trickled down from Macron. He was the architect of French policymaking. Now what we're going to see is a real shift I think in the centre of gravity of French politics from the President's office, the Elysee Palace, to Parliament."