In the wake of Brexit and the shock victory of Donald Trump, the political landscape across the globe appears to be changing. Whilst the idea of globalisation appeals to some, the risk of elite dictatorship grows weary on many who have, and continue to feel left behind.
The EU in its entirety appears disjointed and lacking in common ground, and whilst it continues to move in its rigid form opportunities for far right political parties continue to build momentum.
It may not come as much of a surprise to see the french National Front leader Marine Le Pen storm ahead of the first round of the elections, her much more politically-friendly stance towards immigration (compared with her father’s) appeals to greater numbers who have witnessed the horrifying terrorist attacks witnessed over the last 2 years. France is well aware of her intentions to take France out of the single market, a vote for Le Pen is yet another vote against the establishment.
And what are the chances? If you ask the media they’d respond with a definite no, the same response that was made for Brexit and Trump. If you trust polls, which have so far proven endlessly useless this year, Le Pen stands a much greater chance than Trump or Brexit ever did.
But Le Pen is not the only headache for the EU, Trump’s anti-establishment rhetoric could cripple the single market, and as Merkel has already suggested, hopes of a trade agreement between the EU and US is dead.
Brexit is another headache of course, but Italy’s Referendum in December could leave PM Matteo Renzi out of a job, and given Italy’s ever-growing anti-establishment stance, will it be the 5-star movement that picks up the pieces?
For some, Angela Merkel’s announcement that she will be running for a 4th term in Germany is the EU’s last hope, for others, her heavily critisised migrant quota has already dented her campaign, and will only fuel further anti-EU rhetoric.
But even when you put politics to one side, the economic landscape is looking very grim for the single market. An economy that has seen little growth in 2 years poses further questions as to how sustainable the Eurozone is longer term. It’s widely expected that the ECB will have little choice but to extend its current QE programme beyond March 2017. With Greece expecting further reforms in the months ahead the bloc will face an enormity of headaches of which Brexit is just one of many.
And how will this affect Pound to Euro exchange rates? in a twist of events it could be Sterling that comes out on top.