NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) has released a report commenting on the election season in Europe. The report makes the following points:
- Recent pre-election polls in Europe have not proven to be very useful predictors of vote outcomes.
- The first round of the French presidential election resulted in an expected outcome; the main risks now seem to stem from the looming National Assembly elections in June.
- It is doubtful that the upcoming U.K. vote will reflect buyers’ remorse on the Brexit vote, but fat tail risks still exist. Italy’s legislative elections may produce a political realignment.
- Voices for rejectionism and populism, even if to date not victorious, resonate loudly in spite of improved macroeconomic conditions in Europe.
Elections over the last year have gripped Europe with uncertainty, not least because of confusing run-up polls that have positioned populist, far-right parties in an exaggeratedly favorable position. Pre-election polls in Austria and The Netherland did not assuredly predict the outcome of the votes. The Brexit referendum provides another example.
The results of Sunday’s first round of the French presidential election were aligned with predictions that expected a tight race. Polls correctly favored Emmanuel Macron and Marine Le Pen. Eurosceptics Le Pen and Jean Luc Mélenchon took about half of all youth votes counted in France.
Presidential contestants from France’s traditional parties, François Fillon of the Republican Party and Benoît Hamon of the Socialist Party, have pledged their support for Macron, and this should help swing the next round in that candidate’s favor. The current polls indicate Macron garnering about 65% of the vote in the run-off. National Assembly elections on June 11 and June 18, 2017 are another point of uncertainty, expected to produce a fractured parliament.
Regardless of the predictive power of polls, there is little uncertainty over the prominence of populist-leaning parties, and of euroscepticism and rejectionism in Europe. Election results notwithstanding, dissatisfaction with the policy environment is real and will likely remain a drag on the policy environment in Europe.
KBRA’s full report on the topic, entitled, “Might Le Pen be Mightier Than Her Polls” is available here.
About Kroll Bond Rating Agency
KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).