Europe: Its politics all the way in 2017 - TDS

Research Team at TDS suggests that in the wake of both Brexit and Donald Trump’s victory, a major concern around the European elections is the growing popularity of antiestablishment parties.

Key Quotes

“Many of these are anti-euro and anti-EU, reinvigorating concerns about the viability of the currency union.”

“With the UK economy holding up well after the Brexit vote and markets taking Trump’s election quite well—so far—there is the view that undecided European voters could be persuaded to register a protest vote. Concerns over the economic impact of non-mainstream parties’ policies may have eased given the lack of negative blowback in the UK and the U.S.”

“The problem is that negative economic consequences tend to emerge only gradually. The impact of elevated uncertainty on business investment and employment, as well as the impact of higher barriers to trade, are only evident in the longer run, not over days and weeks, and far too late to influence marginal European voters.”

“In 2017, elections are scheduled for France, Germany, and the Netherlands, and elections are possible for Italy and Spain (if the unstable Spanish minority government fails to pass a budget). Overall, there is ample opportunity for markets to fret about elections as there is the risk that five of the Eurozone’s largest economies go to the polls just as the anti-establishment movement gains momentum.”