As the year of 2017 draws to a close, traders will certainly agree that the year was one of surprises. Despite the year starting on uncertain terms and the euro currency facing further declines, it was a remarkable year for the markets and especially for the euro.
In fact, if one would summarize the year 2017, it could very well have been the year of the Eurozone and the euro currency. Here’s a brief recap of the top events that shaped the markets this year.
The Dutch general elections were one of the first of many for the Eurozone. Held on 15th March 2017, the general elections in Netherlands were seen as one of the biggest tests for the eurozone.
A region that has been a lot of internal bickering among the member nations and especially regarding issues of immigration and refugees. The Dutch elections saw the markets obviously turn nervous.
One of the main contenders in the election was the Party for Freedom (PVV) led by the populist Geert Wilders. Wilders gained recognition on the back of his hard line stance against immigration and the open borders in the EU.
At one point, opinion polls called it a close election, with the prospects of Wilders’ party winning. However, the incumbent Mark Rutte’s VVD party managed to win 33 seats in the 150 seat House of Representatives. Wilder’s PVV party came in second with 20 seats.
Despite the fact that the populist party managed to gain inroads, the markets were happy to see continuity with Rutte’s leadership.
With the success of the Dutch elections, EU policymakers turned their focus to France. Europe’s second largest economy held its elections in April and in May. Similar to the themes playing out in Netherlands, French voters had to eventually choose between Emmanuel Macron and Marine Le Pen.
Ms. Le Pen was of course the biggest talk of the French elections with her anti-EU and populist stance. As with Netherlands, the threat of a potential France break up with the EU, dubbed as Frexit was starting to grow real.
However, the outcome of the Dutch elections brought back confidence into the markets. On Election Day, Macron’s EM party won 66.1% of the votes with Le Pen lagging with only 33.9% of the vote.
With Macron emerging victorious, the markets were convinced that a Macron – Merkel leadership would help integrate the European Union even closer.
The German elections were one of the last in the Eurozone. On September 24, the Federal elections in Germany saw the incumbent Merkel’s CSU/CDU party win. However, the rise of the Alternative for Germany (AfD) managed to take some of the votes away from the party.
The biggest contenders in the German election were Ms. Merkel and the SPD’s Martin Schulz a former President of the European Parliament.
Growth in Germany was strong this year and the upbeat economic progress made it seemingly possible for Ms. Merkel to win another term with ease. But with the AfD also winning nearly 94 seats and the SPD losing some of the votes, German political landscape briefly turned uncertain.
Following the initial attempts by the CDU/CSU to form a coalition without the help of the SPD and the eventual break down of talks, the CDU/CSU party went back to its traditional ally, the SPD to bring normalcy and certainty to the German government.
The outcome of the election results this year in the Eurozone clearly showed that despite the mainstream political parties emerging as winners, there was a fast growing threat of the rise of anti-EU political parties.
While these respective parties performed differently in each of the nations, the fact some of the anti-EU parties managed to gain a foothold into the parliament shows that the threat of a potential eurozone breakup is real unless addressed and fixed by the parties in power.
As the end draws to a close Orbex is providing a free webinar which gives you comprehensive overview of this year in trading and the next. To attend this webinar simply register here.