European Elections 2024 Part II – Focus on France and the UK
Welcome to our latest episode of “What Your Bank Doesn’t Tell You”, where we are talking about the second round in the European Elections 2024 that took place at the beginning of July 2024. We took a closer look at France and the UK, two of Europe's largest economies, and explore the implications of their political and economic changes on the markets.
Listen here to the first part in the series on our key insights of the European Elections.
France:
France has played a crucial role in the European elections and faces significant economic and political challenges. With 20% of the European population and 25% of the European GDP, France is of great importance. The country is grappling with high public debt, security issues, and a migration crisis.
In the national elections, the far-right party "Rassemblement National" made significant gains, prompting President Emmanuel Macron to form an alliance with the left-wing parties. This alliance prevented the far-right party from gaining a majority in the parliament.
Economically, France remains a socialist economy. The government plans to lower the retirement age from 64 to 60, cap prices for basic foodstuffs and energy, and impose extra taxes on high corporate profits. However, these measures could threaten economic stability. The potential instability could lead to market volatility, affecting investments and consumer confidence.
United Kingdom:
The UK, no longer part of the EU, faces its own set of challenges. It is the fifth most indebted country in Europe and struggles with slow economic recovery post-pandemic. The new Labour government led by Keir Starmer has five main goals: economic growth, clean energy, social security, educational access, and a sustainable healthcare system.
Of particular interest is the national wealth fund, which amounts to £7.3 billion and aims to boost job investments. Planned projects include building new factories and promoting green technologies. The UK also focuses on financial services and innovation in Open Banking. These initiatives are expected to attract investors, potentially stabilizing the market and fostering economic growth.
Market Implications:
The political and economic developments in France and the UK will have significant implications for the markets. In France, government interventions in the economy could create uncertainty, leading to market volatility. Investors may be cautious about entering the French market due to potential instability and changing regulations.
In the UK, the focus on clean energy and innovation could attract new investments, particularly in green technologies and financial services. However, the country's high debt level and slow recovery may still pose risks to market stability. Overall, investors will need to closely monitor these developments to make informed decisions.
Overall, France and the UK are facing significant economic and political changes. Both countries are trying to address their internal challenges while playing a key role in Europe's future. The implications on the markets are profound, influencing investment strategies and economic forecasts.
We hope that we provided you with a clear overview of the current developments in these two important European countries and their market implications. Stay tuned for more updates and deeper insights into the European Elections 2024.
Listen to the Podcast Episode here!
