“Defying the odds, vocal populists have won the two major popular
votes in the western world this year. The success of Boris
Johnson and Donald Trump raises an obvious question: could it
happen elsewhere in Europe?” That’s the question put forth by Berenberg’s chief economist
Holger Schmieding and senior UK economist Kallum Pickering in a
note to clients in the aftermath of the US presidential
elections,
which ended in a surprise Trump victory.
And they’re not the only ones. HSBC’s chief European
economist, Simon Wells, expressed
a similar idea in a note to clients on Wednesday,
writing “there is a risk that the Trump victory could boost
the popularity of anti-immigration and populist parties across
Europe.” Of course, the situations in the US and in Europe are not
identical. But, there are some similarities in the
sentiments of the electorates. “After all, the parallel to the anti-Washington rage in the US is
a rejection of the European Union; the parallel to Trump’s
anti-NAFTA rhetoric is the threat to reverse the process of
European integration that, jointly with NATO, has been the
cornerstone of peace and prosperity in Europe since the 1950s,”
wrote the Berenberg duo.
Taking it a step further, they argued that France
is the next crucial vote to watch.
Marine Le Pen, France’s
National Front leader.
REUTERS/Eric
Gaillard
Though an
Italian referendum on changes to the country’s constitution
is right around the corner, the “risk would probably be
containable” if Prime Minister Matteo Renzi loses the referendum
come December, according to Schmieding and Pickering. (Although,
back in August, Nobel prize-winning economist Joseph Stiglitz
told Business Insider the referendum could be the
“cataclysmic event” similar to Brexit that could trigger the
collapse of the eurozone.)
So, given that France is one of the two pillars of the
eurozone along with Germany, there’s an argument that what
happens in that nation’s upcoming presidential election, likely
featuring a showdown between a center-right former president and
a far-right-wing leader, could have greater implications for
the continent than what happens in Italy.
“Could Front National leader Marine Le Pen win the presidential
election on 7 May 2017, possibly even trying to take France out
of the EU or euro afterwards? If so, it could spell the end of
Europe as we know it,” wrote Schmieding and Pickering.
Interestingly, they also drew a parallel between how (some)
voters saw Hillary Clinton and Trump versus how voters might
see France’s former president Nicolas Sarkozy and Le Pen
(emphasis ours):
“The decisive second round in France will most likely pit Le Pen
against the winner of the center-right primaries on 20 and 27
November 2016, either former prime minister Alain Juppé or –
slightly more likely in our view – ex-president Nicolas Sarkozy.
A Le Pen-Sarkozy duel could invoke parallels with the US
vote. Almost like Hillary Clinton, Sarkozy is seen as a divisive
old-timer with significant baggage.”
For what it’s worth, Marine Le Pen was one
of the first major European politicians to congratulate
Trump after he won.
Still, as things stand now, the Berenberg team writes that
they are “fairly confident” that Le Pen won’t win come May, given
that she is significantly behind both Sarkozy and Juppé in
opinion polls. However, they also wonder to what degree polls
might misjudge the mood, and added that they need “to monitor the
political risks very closely.”
Populist
parties on the right and the left are on the rise across
Europe
HSBC
It’s worth zooming out of France and taking a broader look at
what’s happening in Europe. Although the continent has
always had a plethora of voices — Western Europe versus
Eastern Europe, nationalism versus socialism, etc. — the
conversation appears to have shifted more to a debate over “open
Europe” versus “closed Europe,” as the team at Eurasia Group
noted back in January 2016.
“Open Europe” refers to the post-Berlin Wall Europe that German
Chancellor Angela Merkel pushes for: It’s open to the world, and
the borders between (most) European states are open to one
another. By comparison, “closed Europe” collectively shuts itself
off from the outside world, and each country within the continent
closes itself up from the others.
And populist movements have been growing in Europe as the
continent has grappled with ongoing large-scale economic and
political challenges in recent years, including the European
debt crisis, the
migrant crisis,
terrorism, the Turkey-EU
refugee deal, and
Greece.
Notably, back in October,
Buzzfeed News reported data from YouGov,
which polled over an 12,000 people across 12 European
countries from late August to early September in Europe to
“measure the extent of what it termed ‘authoritarian populist’
opinions.” The research found that nearly half of adults held
anti-immigrant and nationalist views.
“These results show that the old days of left-versus-right have
been replaced by a much more complicated, nuanced mix of
political groupings, with profound implications for politics
across Europe,” Joe Twyman, YouGov’s head of political and social
research for Europe, the Middle East, and Africa,
told Buzzfeed News. “Any political party or movement that can
successfully appeal to those of an authoritarian populist leaning
could benefit hugely when it comes to elections.”
