MACROECONOMICS
running strong, and the two main political parties have their own convulsions. On the center-right, the primary contest was between three former prime ministers, Juppe, Sarkozy,
and
Fillon. Fillon, who says he wants to do for France what Tatcher did for the UK, won handily.
On the Socialist side, the unpopular i ncu mb e n t Hollande is not seeking reelection. The left-wing of the party is likely to be pushed aside by its own centrists.
Former
may be the shifting of the French political discussion to the right.
The Dutch do not have such a
FX
European enough
Prime Minister Valls will likely carry the Socialist Party mantle, while former Economic Minister Macron runs as an independent, thus splitting an already weakened position.
on might
officials the
be need UK
undesirable example for that
to to other contemplating
The polls show Fillon beating Le Pen in the second round. It is part of France’s political tradition for the main two parties to support each other in the face of a strong challenge by the National Front.
In some ways, the price of defeating Le Pen now
tradition and their national election is before France. The populist- nationalist Freedom Party is ahead in the polls. It has recast itself much as Le Pen has tried to do to the National Front, moving away from anti-Semitism and homophobia and haranguing
against the perceived
threat of Islam and Brussels. Perhaps the most powerful check
provide
comes in the form of having many parties in a proportional representative system. This forces coalition, and would make it ex t r e mely difficult for the Freedom Party to govern as none of the other parties are willing to join it. Tat said, it is possible that the polls in the Nether l ands, like many in the UK and US, fail to recognize the strength of the populist- nationalists. If the Freedom Party can win a majority or is close enough that a small party can be offered a plumb reward to secure a majority, it
be
hard an
countries leaving
will be difficult block it.
Germany’s Merkel is already tacking right to steal some thunder from the rising AfD Party, which is also pushing an anti-EMU and anti- immigration line. While the AfD will most likely be represented in the next parliament, it is unlikely to challenge the duopoly of power of the CDU/CSU and SPD. Although
FX TRADER MAGAZINE January - March 2017 13
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