A Look at the European Union Political Calendar
The European Union is facing an unprecedented amount of uncertainty. Brexit, a migrant crisis, elevated security concerns, a slowdown in China and unpredictable elections in the United States are all threatening the Union’s economic and political outlook. On top of this, members within the Union are facing a jam-packed election cycle. In a context of waning support for the status quo, this could lead to shifts in the balance of power. Senior Economist Angela Bouzanis takes a look at the upcoming votes we are keeping an eye on and why.
2 October 2016
Snapshot: Hungarians will vote on whether to accept the EU plan of distributing migrants across the continent, i.e. refugee quotas. A 50% turnout is needed to make the referendum legitimate.
The Bottom Line: Prime Minister Viktor Orbán has been one of the fiercest critics of the EU’s management of the migrant crisis and is hoping to increase his appeal to voters at home before elections in 2018. A “no” vote along with a significant turnout would be a boost for Orbán’s government.
If the referendum is a success for Orbán, the government could also push to unwind the powers that the EU has and repatriate some to national states. In addition, the referendum could increase tension in Hungary’s relationship with the EU. EU authorities have threatened to halt development funds to countries which oppose migrant redistribution. If enacted, this could hit Hungary’s economy, although it seems unlikely that the EU would level any meaningful sanctions at this juncture.
Lithuania Parliamentary Election
9 October 2016
Snapshot: All seats in the country’s parliament are up for grabs and a second round of voting is scheduled for 23 October in any constituencies where no candidate wins a majority in the first round.
The Bottom Line: A number of corruption scandals across both the governing and opposition parties have increased political uncertainty in Lithuania. Early polls suggest that the Social Democratic Party, the largest party in the current ruling coalition, is the frontrunner but that its support has waned. Support for the junior coalition parties has also fallen. Despite the less certain makeup of the government, we do not expect a major change to economic or fiscal policy.
Italy Constitutional Referendum
4 December 2016
Snapshot: After failing to secure the required two-thirds support in parliament to push through a constitutional amendment curbing the power of the Senate, Prime Minister Matteo Renzi had to put the amendment to a referendum. The proposal will reshape the Senate so it no longer has equal power with the Chamber of Deputies and cannot call no-confidence votes. The aim is to make Italy a more governable and politically stable country.
The Bottom Line: Renzi has stated that he will resign if the reform fails, turning the referendum into a default vote on his leadership. If Renzi does resign, a period of political paralysis could emerge and there are some risks that the Five Star Movement could gain support. If the referendum passes, it will be a boost to Renzi and should lead to a more streamlined government.
Austria Presidential Election
Snapshot: A rerun of the presidential elections had to be postponed until December due to defective mail-in ballot envelopes.
The Bottom Line: The presidential post is largely ceremonial in Austria, but the vote could see the election of the first far-right head of state in Western Europe in decades. The vote highlights the growing Euroscepticism across the Eurozone.
Romania Parliamentary Election
Snapshot: Romanians will vote to replace their technocrat government that has been in place since last November, after a series of protests brought down the previous administration.
The Bottom Line: A corruption crackdown has amped up the already high political uncertainty and the election looks like it will be a close call. Early polls suggest that the leftist Social Democratic party could take first place but it remains to be seen how the recent resignation of the leader of the National Liberal party, the second largest party, will affect the race.
Spain Parliamentary Election
Snapshot: Two general elections have resulted in the most fragmented parliaments in the country’s recent history and a third election in one year looms if a coalition government cannot be formed.
The Bottom Line: The country has been without a government since December last year, stalling economic reforms and shaking confidence. While economic data has so far remained unscathed, the lack of government is delaying the submission of a 2017 budget draft to EU authorities. If a budget is not submitted by the 15 October deadline, EU authorities could levy sanctions against the country.
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinion of FocusEconomics S.L.U. Views, forecasts or estimates are as of the date of the publication and are subject to change without notice. This report may provide addresses of, or contain hyperlinks to, other internet websites. FocusEconomics S.L.U. takes no responsibility for the contents of third party internet websites.
Author: Angela Bouzanis, Lead Economist
Date: September 29, 2016
TagsMENA Base Metals Commodities Iran Economic Growth (GDP) Asian Financial Crisis Resource Curse Argentina Brexit Asean Housing Market Eastern Europe precious metals Israel Tunisia Investment Japan Unemployment rate public debt Gold Ukraine Brazil Base Metals Africa Exports Political Risk Banking Sector Consensus Forecast Asia United States Mexico Energy Commodities Oil Russia Agricultural Commodities Vietnam Emerging Markets Precious Metals Commodities Canada interview Central America Inflation OPEC Colombia Nigeria GDP Germany Commodities China Infographic G7 Exchange Rate USA scotiabank Portugal IMF Economic Debt Copper India Cannabis Euro Area European Union Healthcare Trade Nordic Economies South Africa Palladium UK Australia Draghi Lagarde Greece election Economists Major Economies chile TPS Italy Turkey Sub-Saharan Africa Bitcoin Canadian Economy Economic Crisis Forex Latin America economic growth oil prices TPP France Cryptocurrency Company News Spain United Kingdom Eurozone Venezuela
Australia: RBA keeps rates at all-time low in July; maintains target for government bond yields https://t.co/cUDZsrDUmF
2 hours ago
Serbia: Ruling SNS handed landslide victory in June parliamentary elections, policy continuation expected https://t.co/mmpRQw9TS6
3 hours ago
Spain: Industrial output plummets again in May https://t.co/fTX3UX2QMg
8 hours ago
Russia: Third estimate confirms slowdown in growth in Q1; recession expected https://t.co/ETQI1Zq62c
1 day ago
Lebanon sinks deeper into the economic abyss as IMF talks stall https://t.co/89DsGZo1jM
1 day ago