With so much of the attention being focused on the UK’s Referendum last June, you could be forgiven for missing the potential headaches the bloc faces throughout 2017.
Sadly, a lot of these headaches are old news that have resurfaced, Greece’s debt crisis, Italy’s bank crisis, Brexit, the list goes on. However, there are new hurdles that markets have to sink their teeth into, the rise of far-right political parties and the threat it poses to the European Union. Then there’s Trump, who quite clearly wants to make trading relations with the EU and China very difficult.
Bookmakers boost odds of Le Pen Presidency
1 in three, the new odds for Marine Le Pen to win the French Presidential elections in April. In comparison, the odds of Brexit happening were of similar odds, and Trump’s odds were even slimmer.
What does this tell us? Le Pen was always expected to make the first round but her chances of winning the second round were always slim. In the wake of Fillon’s scandal, Le Pen has now centred herself where she needs to be, maintaining her clean image and distancing herself from her father’s radical views.
A similar scenario is playing out in Holland, Geert Wilders could be set to storm the Dutch elections next month, with the parties key agenda “de-Islamising” the nation.
Greek debt crisis back under the radar
Greece’s spiraling debt is yet again in the spotlight, with concerns that the nation won’t meet its June payment, forcing further agreements to be negotiated. The nation has a debt to GDP of 175%, with unemployment rates floating around the 25% mark. There appears to be little the ECB or IMF can action to resolve the countries huge debt, and the prospect of a Greece exit (Grexit) grows increasingly likely.
Markets emphasise huge concern for both Greece’s debt crisis and the elections in France, and despite concerns for the UK’s decision to leave the EU, Pound to Euro exchange rates have room for further gains.
We could see a return to 1.20 on the exchange in the weeks ahead if the UK economy continues to show resilience the Brexit vote.