The world is still reeling from June’s Brexit vote, and Trump’s election to the U.S. Presidency has massively increased uncertainty.
If that weren’t enough, the fear of Brexit/The Donald contagion is very real. The French might well be next. France is one of the two pillars of the eurozone along with Germany.
France will hold presidential elections in April of 2017, with many potential ripple effects, including how the EU will engage the U.K. in its process to leave the European Union, and even what the EU of the future will look like.
Primary elections this week confounded pollsters yet again. Prior to these, observers predicted Alain Juppé or Nicolas Sarkozy likely to win the nomination. Now, in a surprising election outcome, candidates Francois Fillon or Marine LePen look far more likely to be elected President.
LePen has openly campaigned on pushing back on EU central control and even championed a “Frexit” referendum on France’s EU membership.
Fillon
, although more moderate, is expected to push for a much more conservative agenda for France. That includes less regulation from Brussels, strengthening the French (not EU) identity, and getting tough on immigration, especially Islamic immigrants.
And at this point, no one is completely ruling out LePen.
There are several parallel trends among the U.K. (Brexit), the U.S. (Trump election), and France that ought to be concerning for many:
· Rage against governments that are viewed as out of touch and insensitive to the needs of everyday workers: in the U.S., there was anti-Washington rage; in both the U.K. and France, there is growing sentiment that the EU bureaucrats in Brussels have been too meddling.
· Concern about the unintended consequences of global trade, resulting in growing income inequality and a corresponding reaction to become more protectionist; Trump’s anti-NAFTA rhetoric has parallels with increasing concerns in the U.K. and France about the negative impacts of current European integration efforts.
· Uncontrolled immigration is an ongoing issue in all three countries.
· Slow economic growth, rising unemployment, technology replacing low skilled jobs, jobs being sent to low labor rate markets and the remaining higher-paying jobs being replaced with lower-paying positions that have much less stability.
In France, unemployment remains significant, despite slow economic recovery and a slight improvement in unemployment figures. EU migration fears continue to grow, and the threat of Islamist terrorism remains palpable, coupled by fears that migrants are changing the national culture. Current President Hollande has the lowest approval ratings of any French head of state in history. The natives are restless — sound familiar?
Will a formal “Frexit” happen?
Probably not, according to French pollsters. But of course everyone knows how well the pollsters predicted Brexit and a Trump victory, and the French pollsters were dead wrong on this week’s French primaries, too.
No matter how it shakes out, the ride will be bumpy for the EU in the short to medium term.
To make sure your distribution/channel strategy is Brexit-ready, listen to Globalocity‘s free podcast interview about the Brexit vote and possible outcomes.
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