Global Perspective

Investors appear to be penalising Europe based on a perception that its politics are a mess and its economy is mired in a fundamental economic malaise with little hope for improvement. We think it is time to rethink that perception – not least because the data is already refuting it. “European value” in the economy could end up being a bigger investment story than the threat to “European values” in its populist politics. But we also acknowledge that it is sensible to assess the possibility of a major populist breakthrough.

Polls for the French Presidential election have been tightening, raising the very real prospect of Marine Le Pen of the National Front (FN) facing off against Jean-Luc Mélenchon on the far-left in the second round. In this note I sketch out Europe’s incipient economic recovery and then discuss perhaps the biggest threat to that recovery: the possibility that Pen ascends to the Presidency of France and successfully implements her campaign promises.