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26 April 2017

Hi ho, hi ho, it's off to vote we go...



What with it being almost a year since we last (in the UK) went trotting dutifully along to the polling station, it’s time for another vote. It’s getting to be one a year, after the Scottish referendum (admittedly, we didn’t all vote in that, but from the wall-to-wall press coverage you could be forgiven for mistaking it for a UK-wide poll), the 2015 general election, the EU referendum and now a new general election. It’s all becoming a little tedious, and I don’t envy the Swiss their referendum-heavy political system (although I do envy their ability to manage their economy…)

But standing back a bit and looking with a wider gaze, voting does seem to be very much the flavour du jour. Recently, apart from the UK, we’ve seen the US, the Netherlands and France (halfway, so far), and we’ve got Germany amongst others still to come in the near future. 

Brexit and Trump seemed to be pointing in one direction; the consensus view appears to be that the Netherlands and France have halted that flow. I’m not so sure, though. Although the populists in the Netherlands did not in the end emerge as the largest party, what I thought was striking was that the establishment prime minister’s party lost about 30-odd per cent of its seats and the Wilders party gained around a similar percentage. Not enough to take power, but a pretty substantial shift away from the ‘recognised’ parties. Likewise, in France, Marine le Pen came second to Emmanuel Macron, but that result has meant the traditional parties are not represented at all in the second round run-off. The UK has had its moment, with brexit, but right now the polls suggest that the likely result will see the grown-ups confirmed in power, and the extremes pushed further away. But we’ll see; maybe that’s too optimistic.

The markets made very clear what they thought, after the French results began to come out on Sunday evening. The Euro strengthened and European equity markets (including the UK) put in a strong performance. The message seems to be that although Macron has minimal experience (a very short period as a minister under François Hollande), he looks like the status quo - enarque, investment banker - despite his protestations of being an outsider, and the markets like that.

But the stakes here seem to be getting very high. Certainly in my lifetime, in western democracies the changes in government have largely been between moderate centre-right and moderate centre-left; for sure, we mostly have our own preference between them, but in reality the differences are not that great and by and large they don’t threaten to disrupt the overall progress of society. The potential now is of a different order. The UK leaving the EU - whether we were personally in favour or not - will not bring about armageddon, whatever some may claim; the relationship has been semi-detached for a long while, so probably an unpleasant hiccup rather than a full-blown disaster. But Marine le Pen would dump the Euro for a new franc (another new Franc, for those who remember) and likely also quit the EU. That, given France’s central position, is of a far greater significance, with serious probable consequences. 

For the UK, as I say, right now it looks as though sanity will prevail, but we should be aware that the current opposition is driven by people who are adherents of a bunch of ‘isms’ that killed millions of their own people in the twentieth century, because they disagreed with their politics; that’s not a happy thought.

Anyway, I’m sure this article makes clear that I am confused by all of this. I’ve alluded to 1848 as a blueprint for the current wave of populism before, and I stick to that; maybe history can show us the way. But there’s one thing I am sure of - politics is what is driving markets at the moment, so we can’t just sit and let it wash over us. But politicians, please, once elected, could you perhaps get on with the job, instead of generating public vote after public vote; frankly, the public are suffering vote fatigue.

  



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