Mar 5, 2019

European Parliament elections could pave way for end of euro

French President Emmanuel Macron. Photo: Chesnot/Getty Images

The European experiment is in trouble ahead of the largely ignored European Parliament elections in May.

Driving the news: French President Emmanuel Macron on Monday placed an op-ed in newspapers around the continent — in all 28 eurozone countries — warning of the "trap" that could destroy the EU.

  • "Never since the second world war has Europe been so essential. Yet never has Europe been in such danger," Macron writes.

Details: The every-five-years elections select lawmakers for the body, which shares power over the EU budget and legislation, and makes sure other EU institutions are working democratically.

It's a largely ceremonial body whose elections draw diminishing voter turnout (sinking to around 45% in 2014), but the elections have already shown their importance, Markus Schomer, chief economist at PineBridge Investments, tells Axios.

  • "Brexit showed us that they can be very, very consequential and we overlooked it then, didn't we?"

Flashback: In the 2014 European elections the right-wing U.K. Independence Party triumphed over the reigning right-of-center Conservatives, leading the Conservatives to promise a referendum on leaving the EU if they were re-elected.

The next domino in the euro's fall could be France, Schomer says.

  • "We're living in a world where there are a lot of angry people everywhere. My worry is something could happen in these elections again that lights the fuse for another Brexit-like event a few years from now."
  • A triumph by France's far right and "I think they'll blow up the euro," Schomer says, "and of course blowing up the euro will be a 2008-style financial crisis."

The big picture: This is all happening as the eurozone barrels towards economic growth crisis.

The IMF revised down its forecast for growth to 1.6% in January, but Mohamed El-Erian, chief economic adviser for Allianz SE, said on Monday that such an estimate is actually too optimistic.

He expects the eurozone will struggle to deliver even 1% GDP growth this year and calls the slowdown the biggest risk to the market.

  • Worse still, El-Erian tells Reuters the European Central Bank has limited tools at its disposal to respond to economic weakness and European governments are not prepared to respond with spending.

Macron's op-ed seems to confirm the gravity of the situation:


Go deeper

Cruise ship evacuations: More Americans test positive for coronavirus

A bus carrying American citizens from the quarantined Diamond Princess cruise ship arrives at the U.S. government-chartered aircraft that is taking them back to the United States while authorities wear protective suits look on at Haneda airport in Tokyo on Monday. Photo: Tomohiro Ohsumi/Getty Images

Another 14 passengers tested positive for the novel coronavirus during their evacuation from the Diamond Princess cruise ship before being flown in a "specialist containment" area of the plane to the United States, per a Trump administration statement early Monday.

Details: Over 40 Americans who had been on the ship had previously been confirmed as infected and will remain in Japanese hospitals for treatment, NIAID director Anthony Fauci told "Face the Nation" Sunday. The rest were evacuated, and these latest cases were among them. All evacuees will undergo a 14-day quarantine upon arrival later Monday.

Go deeperArrowUpdated 35 mins ago - Health

GM to exit Australia, New Zealand and Thailand

GM's Holden brand is popular among racing fans down under, and it's been a regular fixture at events like the Bathurst 1000 V8 Supercar Race in Australia. Photo: Speed Media/Icon Sportswire via Getty Images

General Motors is retiring its Holden brand from sales in Australia and New Zealand and winding down operations in the two countries and Thailand by 2021, the company confirmed in a statement Monday.

Why it matters: The Holden brand has been in Australia and New Zealand for 160 years, per a GM statement issued in Australia. It is beloved by many motor racing fans down under. Holden produced Australia's first wholly locally made car in 1948.

Go deeperArrowUpdated 2 hours ago - Economy & Business

In photos: Deadly Storm Dennis lashes U.K., Ireland and western France

A family is rescued from a property in Nantgarw, Wales, on Sunday. The storm comes a week after the U.K. was battered by storm Ciara, which killed two people, per the BBC. Photo: Matthew Horwood/Getty Images

Storm Dennis continued to pummel parts of England, Wales and Ireland over Sunday night with heavy rain after battering Northern Ireland and Scotland, per the official British weather agency the Met Office.

Why it matters: It's the second-strongest nontropical storm ever recorded in the North Atlantic Ocean, with its hurricane-force winds and heavy rains that caused widespread flooding across the U.K., the Washington Post notes. Police in Wales confirmed Sunday they found the body of a man who fell into a river as the storm lashed Ystradgynlais.

See photosArrow3 hours ago - World