European Market Analysis: The EU Elections and Investor Confidence

After an initial negative reaction to the recent French and Greek elections, the European markets have stabilized. From an outside perspective, the two EU elections seemed to move against Europe’s outlined plans for solving the continents debt crisis. However, Europe’s new political leadership chosen by the public could provide a more balanced and fresh solution to Europe’s problems, according to European market analysis. 

In the Greek elections, voters turned their backs on the mainstream politicians who had championed the cost-cutting measures that were demanded by international leaders, which lead to an even more crippled financial system and high unemployment rate. As a result of this political shift, Greece was left with no strong leadership, unsettling investor confidence in the European market. In France, the former President Nicolas Sarkozy was ousted in favor of Francois Hollande, a Socialist who has publicly stated that he has a strong dislike for the wealthy and who campaigned anti-austerity measures. His presidency also brings an end to France’s close relationship with Germany, who had been pushing Europe’s austerity drive. Overall, voters rejected the belt-tightening measures that come part and parcel with international bailouts. It is these movements and Europe’s resultant shifting political landscape that has unsettled investor faith in the European market.

However, it is not all doom and gloom for investors. European market news sources have reported that after an initial plunge, markets closed higher as initial worries and concerns largely dissipated as analysts further examined European market countries. In France, investors listened closely to Hollande’s promise to encourage economic growth, as well as the measures by which his governance would do so. In other European market countries, Spain announced how they would go about supporting the nation’s struggling banks. Prime Minister Mariano Rajoy stated that it was still a possibility that public money would be used to inject cash into the country’s financial system.

Investors are now waiting in anticipation to her further European market news on which to base their confidence on. If one things is for certain, it’s that Europe will have a new balanced approach to its European debt crisis solution. Until this solution is more clearly laid out, the European markets should remain fairly muted. Voters have spoken, which will force European leaders to get back to the drawing board to come up with a solution to the debt crisis that is more acceptable to the European public, as opposed to previous solutions which served to keep international leaders happy. European’s new leaders will have to decide on how much austerity is too much, and where to begin spending again to create demand, lower the unemployment rate and increase investor confidence in the European market.