We delved deeper into the process for the upcoming June 6-9 elections to the European Parliament and the relevant opinion polls last week. Now we examine the likely potential implications for the capital markets, now and into the future.
In general, we believe the election will have little significant short-term impact on the financial markets. This is what past European elections suggest. During previous elections the Economic Policy Uncertainty Index did not fluctuate noticeably. Similarly, the DAX and EuroStoxx stock indices remained relatively stable.[1] This year, moreover, the markets seem more focused on other geopolitical and economic issues than on Strasbourg, and Brussels, the seats European Parliament.
Looking ahead, however, the Parliament has important work to do. One of its crucial tasks in our view should be to further develop and strengthen the financial and banking sectors in the EU. The deepening of the Capital Markets Union seems particularly important. Sufficient funding is needed for top-priority, transformative plans, such as green initiatives, digital advancements, and enhancing resilience— all vital to securing Europe’s future competitiveness.
