Currency Analyst since 2010

EU: euroskeptics gained votes

Anti-European Union and far-right parties posted strong gains in elections to the European Parliament in some countries on Sunday, repots Wall Street Journal. This means that more and more Europeans are against economic austerity.

The early results show that the euroskeptic parties won the biggest share of the vote in France (25%), the UK, Greece and Denmark. Centrist, pro-European parties are still expected to hold a broad majority of the 751 seats in the new Parliament, which decides on EU laws together with national governments. However, anti-EU lawmakers could complicate passing measures on which mainstream parties are divided, including a planned free-trade deal with the US.

ANZ Bank New Zealand: “These results represent a shot across the bows of governments across Europe, who will be forced to take note and appease dissatisfied voters if they want to stand a chance of re-election down the track. Our view is that Europe’s debt and structural problems have been papered over, not resolved, and that a further bout of financial volatility is probably just a question of when.”

Danske Bank: “While there might be some short-term ‘noise’ from the outcome of the EU-election, the impact on the markets is likely to be limited as attention turns to the upcoming ECB meeting. The market reaction so far this morning has also been very limited with EUR/USD only moving marginally lower”.

Photograph: EPA

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