Courtesy of Mish.
In a morning email, Saxo Bank chief economist Steen Jakobsen had a few comments on the European parliamentary elections.
Here's my two cents on the EP-2014: One conclusion which stands out is growth and reform will be delayed. The trade remains LONG fixed income. Everything which just happened in Ukraine, ECB and now EP-2014 has a negative growth/inflation impact.
Europe is caught out – miscommunication is the norm, and the mandate for change just moved further away despite the strong showing for anti-EU votes.
The anti-EU vote is diluted by institutional frameworks and a modus operandi in proceedings which makes it impossible to change the course, but hopefully It can change the pace.
Europe rejected Barosso’s idea that the solution to Europe’s problem is more Europe – they shouted: No! It’s a better working Europe.
Steen
Rising Unemployment, Slowing Growth
On his blog, Steen offers his detailed view in Europe's lurch to right will see unemployed, growth, emerge as losers.
Massive eurosceptic bloc breakthrough at parliamentary elections impossible to ignore European project at risk as voters reject Brussels' push for ever-further integration. Real losers in vote continue to be unemployed and growth prospects as Europe divisions rise
Across Europe, EU-sceptic voters gained ground, but it could be in vain as the overall majority of the old guard: Conservative, Liberals, Greens and Social Democrat’s still carry 70 percent of the mandates.
How the protest votes engage with the main stream parties will set the tone for Europe over the next five years. If the protest parties just want a floor to shout “No thank you to Europe”, then we will see the old parties align themselves more towards the middle and dilute the negative votes. On the other hand, if the EU-sceptic votes want real influence, then compromise and seeking real influence on key votes will be the strategy.
The European Parliament makes a new law every second day, which is scary in itself, but it also shows you that Europe today is very much a machine where stopping the momentum is extremely hard. The EU system is built and set up to protect the bureaucratic model and it clearly favours pro-EU inclined political parties.
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