EU elections: Five key events on the horizon
Investors have been taken aback by a number of recent political outcomes. The first surprise came as Britain voted to leave the European Union (EU) in June 2016. The next came as Republican nominee Donald Trump was elected the 45th president of the United States. The implications from these changes could be vast, but much is still unknown. As we await additional information to formulate the impact on risk and return from these events, it is just as important to keep our eye on the horizon for the next events that will unfold.
As Britain prepares to leave the EU, leaders across the continent fear contagion risk as others members could leave the bloc. Nationalist parties focused on immigration and sovereignty continue to gain support across Europe. Over the next 8-10 months, several elections may determine the course of the EU and whether it retains enough support to remain together. Below is a short summary of events to watch for their potential impact on the market.
Bucking the populist trend, Austria elected centrist Alexander Van der Bellen on December 4. The defeat of Norbert Hofer, the Freedom Party candidate promising referendum on EU membership, alleviates pressure on the EU as it defends its membership ranks.
Prime Minister Matteo Renzi becomes the second European leader behind David Cameron to resign after losing a referendum vote at the polls. Renzi’s resignation comes after the Italian people rejected on December 4 a constitutional reform to reduce the number of seats in their senate. This opens the door for the Five Star Movement, a populist, anti-establishment party that has discussed a referendum on EU membership. Elections to replace the Prime Minister are scheduled to be held in February 2018.
The Dutch take to the polls in March 2017. Should the Party for Freedom (PVV) win the majority, PVV leadership has indicated that it most likely will seek a referendum on the nation’s membership in the EU.
It appears the final will see Republican and former Prime Minister Francois Fillon face populist National Front candidate Marine Le Pen. In the meantime, the French Socialist party will hold primaries in January to determine their candidate after current president Francois Hollande announced he will not seek re-election. The first round of the presidential election takes place on April 23, 2017, with any run off held on May 7, 2017. Le Pen is running on a platform focused on immigration, Islamist extremism and economic reform. She also has pledged to hold a referendum on EU membership.
German chancellor Angela Merkel announced she will seek a fourth term as German chancellor. The election will be held sometime between late August 2017 and late October 2017. Currently, Merkel has maintained approval ratings of above 50 percent but could face challenges in building a coalition government.
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