France is the next big vote to watch
That's the question put forth by Berenberg's chief economist Holger Schmieding and senior UK economist Kallum Pickering in a note to clients in the aftermath of the US presidential elections, which ended in a surprise Trump victory.
And they're not the only ones. HSBC's chief European economist, Simon Wells, expressed a similar idea in a note to clients on Wednesday, writing "there is a risk that the Trump victory could boost the popularity of anti-immigration and populist parties across Europe."
Of course, the situations in the US and in Europe are not identical. But, there are some similarities in the sentiments of the electorates.
"After all, the parallel to the anti-Washington rage in the US is a rejection of the European Union; the parallel to Trump's anti-NAFTA rhetoric is the threat to reverse the process of European integration that, jointly with NATO, has been the cornerstone of peace and prosperity in Europe since the 1950s," wrote the Berenberg duo.
Taking it a step further, they argued that France is the next crucial vote to watch.
Though an Italian referendum on changes to the country's constitution is right around the corner, the "risk would probably be containable" if Prime Minister Matteo Renzi loses the referendum come December, according to Schmieding and Pickering. (Although, back in August, Nobel prize-winning economist Joseph Stiglitz told Business Insider the referendum could be the "cataclysmic event" similar to Brexit that could trigger the collapse of the eurozone.)
So, given that France is one of the two pillars of the eurozone along with Germany, there's an argument that what happens in that nation's upcoming presidential election, likely featuring a showdown between a center-right former president and a far-right-wing leader, could have greater implications for the continent than what happens in Italy.
"Could Front National leader Marine Le Pen win the presidential election on 7 May 2017, possibly even trying to take France out of the EU or euro afterwards? If so, it could spell the end of Europe as we know it," wrote Schmieding and Pickering.
Interestingly, they also drew a parallel between how (some) voters saw Hillary Clinton and Trump versus how voters might see France's former president Nicolas Sarkozy and Le Pen (emphasis ours):
"The decisive second round in France will most likely pit Le Pen against the winner of the center-right primaries on 20 and 27 November 2016, either former prime minister Alain Juppé or - slightly more likely in our view - ex-president Nicolas Sarkozy. A Le Pen-Sarkozy duel could invoke parallels with the US vote. Almost like Hillary Clinton, Sarkozy is seen as a divisive old-timer with significant baggage."
For what it's worth, Marine Le Pen was one of the first major European politicians to congratulate Trump after he won.
Still, as things stand now, the Berenberg team writes that they are "fairly confident" that Le Pen won't win come May, given that she is significantly behind both Sarkozy and Juppé in opinion polls. However, they also wonder to what degree polls might misjudge the mood, and added that they need "to monitor the political risks very closely."
It's worth zooming out of France and taking a broader look at what's happening in Europe. Although the continent has always had a plethora of voices - Western Europe versus Eastern Europe, nationalism versus socialism, etc. - the conversation appears to have shifted more to a debate over "open Europe" versus "closed Europe," as the team at Eurasia Group noted back in January 2016.
"Open Europe" refers to the post-Berlin Wall Europe that German Chancellor Angela Merkel pushes for: It's open to the world, and the borders between (most) European states are open to one another. By comparison, "closed Europe" collectively shuts itself off from the outside world, and each country within the continent closes itself up from the others.
And populist movements have been growing in Europe as the continent has grappled with ongoing large-scale economic and political challenges in recent years, including the European debt crisis, the migrant crisis, terrorism, the Turkey-EU refugee deal, and Greece.
Notably, back in October, Buzzfeed News reported data from YouGov, which polled over an 12,000 people across 12 European countries from late August to early September in Europe to "measure the extent of what it termed 'authoritarian populist' opinions." The research found that nearly half of adults held anti-immigrant and nationalist views.
"These results show that the old days of left-versus-right have been replaced by a much more complicated, nuanced mix of political groupings, with profound implications for politics across Europe," Joe Twyman, YouGov's head of political and social research for Europe, the Middle East, and Africa, told Buzzfeed News. "Any political party or movement that can successfully appeal to those of an authoritarian populist leaning could benefit hugely when it comes to elections."