Euro Election Results 2019

Yesterday we pointed out that we expected Nigel Farage’s Brexit Party to dominate the election gaining some 30 seats and in fact they achieved 29 – when one considers the Party is less than 2 months old, that is some considerable achievement.

That said, UKIP the Party Farage left which previously had 24 seats actually achieved zero – yes zero so its clear that all of its supporters moved on to the Brexit Party and so too have a number of Conservatives and Labour Party members.

Formerly the Conservative Party which is currently the Party of Government in the UK had 19 MEPs now they have just 4. We expected the Conservative number of seats to reduce dramatically but not that dramatically. Labour – the Official opposition have little to be pleased about either. They reduced their number of seats from 20 to 10.

The other major gainers were the Liberal Democrats – a Pro EU Party – which came second with 16 seats up from their previous 1 and the Green Party, another Pro EU Party gaining 7 seats up from 3 previously.

It was clearly an election around Brexit with the Pro Brexit vote essentially all going to the BREXIT Party and the anti-Brexit vote being shared between the Liberal Democrats and the Greens plus a smattering of Scottish and Welsh nationalists.

The UK Government will now be thrown into a degree of turmoil, not because the BREXIT Party will have any power per se but because both the 2 major political parties, the Conservative Party and Labour both know that if there were a general election tomorrow, while the tide is still in flow, they would lose heavily to the BREXIT Party until the Brexit situation is resolved once and for all.

Today we have seen gold rise some £4 per oz to £1014 and silver is up 6 pence to £11.52 and in US dollar terms gold is up just $1 and silver is up 3 cents but we have to bear in mind that today was a Bank Holiday in the UK and its Memorial Day in the US so we are expecting more significant moves tomorrow  or at least a better indication of how the markets are truly assessing this situation.

In total 400 million people across the EU’s 28 member states were eligible to take part in this election with the UK showing a turnout of some 37%, but the EU as a whole saw a turnout of some 50.8% up from 42.6% in 2014.

Elections of note have been; the victory of Matteo Salvini’s Lega Nord Party in Italy obtaining at least 32% of the vote and in France, Marine Le Pen’s right-wing group National Rally secured victory against Emmanuel Macron’s En Marche. Germany also saw leader Angela Merkel lose six seats but continue to claim a majority.

Eurosceptics are certainly advancing in many parts of the EU and the 3 major Groupings within the European Parliament is the European People’s Party with 180 seats 24% and the Progressive Alliance of Socialists and Democrats with 145 seats or 19% and The Alliance of Liberals and Democrats for Europe with 109 seats or 14.5%

So where do we go from here? Well its our contention that although the make-up of the European Parliament has changed a little, we must remember that it is the European Commission which broadly dictates policy and direction.

That said, it would be foolish to ignore the political changes and that Europe as a whole, has to listen more to its constituents.

As far as the UK is concerned, it will become embroiled now with a leadership election of the Conservative Party and the victor will automatically become the next Prime Minister. With both the Country and Parliament more or less split between Remainers and Brexiteers it’s difficult to assess how the New PM will be able to get any measure through the UK Parliament which we envisage will have to result in a general election – though neither Labour nor the Conservatives would want that before Brexit is solved for the reasons mentioned earlier.

We just foresee for the time being confusion, mixed messages and a degree of political turmoil. This will have a detrimental effect on sterling and a positive one on gold and silver prices, at least short term whereas ironically, we believe that in the US the opposite will happen, the dollar will strengthen, and precious metal prices are likely to fall.

We shall of course provide further updates as these matters progress. What are your predictions for the next few months remembering that the UK deadline for a BREXIT has been extended to 31^st October of this year?