More political stability does not cancel long-term risk

The electoral cycle in France and Germany ended a period of increased political risk and brought more stability to Europe for at least the next four years.

If after the vote in favor of the Brexit and Donald Trump, such a development will probably be interpreted as good news by financial markets which remain very sensitive to uncertainty, Cyceon reminds that Emmanuel Macron and Angela Merkel have only succeeded to federate between one quarter and one third of the voters registered in their respective countries.

In addition to this fact that relativizes political continuity, it also indicates that the risk of rupture persists in the long term and that given the difficult social, economic and security context, should we not underestimate the capacity for political risk to re-emerge at the first opportunity of an exceptional situation or a crisis.

Growing inequalities in all spheres – not just wealth – is a reservoir of tensions capable of overturning the political majorities that appear to be strong thanks to favorable ballot conditions.

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