The EU is under siege from a rise in populist sentiments tugging at the seams of the very fabrics of its existence. From Greece to Cyprus, all the way to Britain and Italy, there’s no shortage of dissatisfaction with the EU and all that it represents. Now, France might be gearing up to join the list of countries that have registered their displeasure with the EU.
Any political commentator will be quick to deduce that the EU is coalition of strange bedfellows because it mostly resembles a parasitic relationship of weak and strong nations. In the couple of years, resentment has been building up among the citizens of some strong member nations of the EU who feel that their EU membership is not worth its price. For instance, many strong nations are facing a migration crisis because EU permits EU nationals to travel freely within member nations.
Here’s How France might be preparing to exit the EU
A populist voice is rising up in France to take the country out of the EU and there’s no telling how things could eventually turn out when the French head up to the polls in May. The clamor for Brexit started like a joke until it eventually became a reality when people voted ‘Yes’ to Brexit in an historic referendum.
U.S. President elect Donald Trump also rode the populist vote to power even though pundits were certain that he would lose because of the many controversies surrounding his candidacy.
Marine Le Pen, leader of France’s National Front party is running for the country’s presidency and she is staking her bid on taking France out of the EU, a ‘Frexit’ if you please. If she wins the election, she says she’ll devote the first six months to working out a deal with other strong nations to build a basket of currencies to rival the Euro. She’ll also revive the franc and peg it against the basket of currency of those strong EU nations.
Ms. Le Pen is passionate about reducing France’s relationship with the EU or even taking the country out of the EU. She ran for office in 2012 and the key point of her campaign was that she’ll make France drop the Euro in a quick and decisive move. Of course, she lost the elections in 2012 because cooler heads prevailed. However, she is now promising a more levelheaded approach, which could improve her odds at the polls in May.
The EU is falling apart at the seams
Many countries are under pressure to conform to some of the economic and monetary polices put forth by the EU – policies that the citizens of such countries have rejected. However, the isolationist wave sweeping across Europe is positioning the EU’s oversight function as a covert move to erode the sovereignty of member nations.
France’s Ms, Le Pen echoes some of the sentiments that many EU nationals are harbouring towards the Euro as a common currency. In her words, “The euro has not been used as a currency, but as a weapon—a knife stuck in the ribs of a country to force it to go where the people don’t want to go,” In another speech, she mentioned that “do you think we accept living under this threat, this tutelage? It’s absolutely out of the question.”
However, investors have not yet started taking cognisance of the risks that a ‘Frexit’ could pose to the Eurozone. If Ms. Le Pen succeeds in breaking France away from the Euro, investors would be forced to reduce their exposure to French assets. More so, investors will lose faith the long-term survival of the EU because a ‘Frexit’ could be more damaging in the EU than the Brexit. However, Victor Alagbe, an analyst at Tradeplus observes that “the market doesn’t appear to be worried about ‘Frexit’; yet, for now Trump is major market-moving phenomenon in the political landscape.”