Italian Elections: Goodbye, Europe?

Now that Italy has voted, what does this tell us about the future of Europe?

Technical Analysis
09 mar 2018
Italian Elections: Goodbye, Europe?

The unity and stability of the European Union once again came under fire, this time due to parliamentary elections in Italy, one of the core members of the bloc. On March 4 Italians, who have a tradition of holding elections way more often than other countries, voted for yet another government and this time eurosceptic parties won. What does this entail for the future of the European Union?

First of all, let us take a look at the result. The big winner in these elections was the Five-Star Movement, a far-right party that started as an anti-establishment movement headed by a comedian (now diseased); they gained 32% of the vote. The Democratic party managed to gather almost 19% of the vote, which would not be so bad if it were not for the fact that other, smaller parties are grouped together in the center-right: Lega (18%), Forza Italia (14%), Fratelli d’Italia (4%), who jointly hold about 36% of the vote. This makes the dream of a democratic government impossible and instead places control over Italy’s affairs in the hands of center- and far-right parties.

Interestingly enough, the far-right parties seem not to want to ally themselves with the Five-Star Movement. Right now the Five-Star Movement is holding negotiations with the Democratic Party (which leans towards the left) about forming a coalition, since together they will hold more than 50% of the votes and the DP itself is highly unlikely to band together with the far-right. However, even if this coalition becomes reality, it would still be under the leadership of the Five-Star Movement.

The common tone of the parties who won in this election is already familiar in Europe: it is populist and anti-immigration, often pointing a blaming finger at the European Union for forcing Italy’s borders open. Migrants are a particularly big concern in Italy right now, considering the wide access offered by the Mediterranean sea. They also provide the perfect opportunity for populist politicians to scare people and try to win votes based on that fear - and it seems to be working.

Because the tone the winning parties seem to favor is so focused on the protection of the nation rather than being open to international cooperation (and it is somewhat echoed in other European countries - France narrowly avoided it in last year’s elections, and Germany has a far-right party in parliament for the first time since World War II, and so do the Netherlands, not to mention the even more nationalist tendencies of Southern Europe), it appears that whatever government they are able to form will have a difficult time dealing with the European Union and its values. While the situation is contained in other countries by offsetting factors, placing the far-right sentiments in opposition, rather than in control of policy-making, in Italy the situation is far scarier.

Whatever may come, one thing is certain: Europe needs to address the concerns of the Italian people, the problems that have led them to vote in such a manner. Only by changing its approach can Europe try to prevent the conflict from escalating. Otherwise it might be risking Italy having their own referendum and choosing to leave the EU somewhere down the line.

SuperForex
CAD/JPY: Fundamental Review & Forecast

Technical Analysis

CAD/JPY: Fundamental Review & Forecast

The CAD is under many negative factors despite impressive economic statistics. The deals to SELL seem more effective given that investors prefer safe assets.

SuperForex
09 mar 2018
EUR/USD Technical Analysis

Technical Analysis

EUR/USD Technical Analysis

The pair will likely remain bearish today.

SuperForex
08 mar 2018
EUR/SGD: Fundamental Review & Forecast

Technical Analysis

EUR/SGD: Fundamental Review & Forecast

The EUR is under pressure due to the results of elections in Italy. Short deals can be effective in the short term based on the price correction.

SuperForex
07 mar 2018