Echoes of Brexit: Volatility Rises in European Markets Ahead of French Election
SputnikNews.com
12.04.2017
The rise of anti-establishment populism, Euroscepticism, and the popularity of radical left or far-right solutions are feeding growing concerns of France possibly leaving the Eurozone after the upcoming election, giving the market anxiety over Europe’s economic future.
Kristian Rouz — In a similar fashion to the pre-Brexit referendum market dynamics, European traders and investors have expressed mounting anxiety over the upcoming presidential election in France, set for 23 April. The steep ascent of the right-wing populism over the past year in Europe and the US has led many observers to believe the far-right candidate Marine Le Pen has a serious chance of winning the Republic’s Presidency, pulling France out of the Eurozone and thus reshaping the economic landscape of Europe.
There are also other candidates in the French election, whose high popularity and radical fail to inspire any confidence in the market. The left-wing radical, Jean-Luc Melenchon, who is seeking to hike taxes and withdraw from international trade pacts, has risen to third in the opinion polls recently (Le Pen now ranks second, below the centrist Emmanuel Macron).
Melenchon’s leftist agenda is an even greater concern to the European markets than Le Pen’s isolationist aspirations, as the immediate effects of the right-wing populism to the economy have been observed in the UK and the US over the past several months. Meanwhile, the leftist emphasis on greater wealth redistribution in the slow-growth environment is deemed quite alarming.
“The rise of Melenchon reminds us that Euroscepticism is a more widespread phenomenon across much of Europe than many believe, and that a runoff between Melenchon and the Front National’s [Marine] Le Pen would certainly give financial markets palpitations,” BNP Paribas Investments Partners said in a note.
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