Last year was many things, but it was not boring. From a significant surge in populism against “the establishment” to shock election results and an ongoing, dramatic Syrian war, this year has seen significant ups and downs and a clear change in the world order. Next year will start with Donald Trump in the White House and then continue with the UK officially on its path towards leaving the EU and France and Germany bracing themselves for explosives elections.
Key Events Of 2016
On June 23rd, the UK voted to leave the European Union, with 52% of the population choosing to side against then Prime Minister David Cameron. The referendum turnout was 71.8% with 30 million people voting. Scotland, Northern Ireland and London all voted overwhelmingly to remain, while the rest of England backed Boris Johson and his Leave campaign.
This resulted in Cameron’s resignation and a bitter Conservative Party battle for a new leader to run the country. On July 11th, Theresa May was announced the new Prime Minister by default after her competitors chose not to stand for the leadership. She backed Remain, but has since altered her stance with the new rhetoric being ‘Brexit means Brexit’.
The British economy seems to have weathered the storm so far. However, the pound fell to a 30-year low triggering increased costs. Britain has not yet left the European Union and can only do so once they have triggered Article 50 of the Lisbon Treaty. After doing so, the UK’s negotiators in Brussels have two years to agree on the terms of exit and suitable post-Brexit arrangements to ensure continuity of business and trade.
On November 9th, it was announced that Donald J. Trump would be the 45th President of the United States of America after defying polls expectations and winning 306 electoral votes compared to Hillary Clinton’s 232. The landmark victory came after Trump won a landslide in Ohio, Florida and North Carolina, all of which were expected to vote in favour of the Democratic nominee.
Trump won a significant victory for the Republicans who also took a majority in the Senate, meaning that he will have more room to manoeuvre his policies than Barack Obama did. Voter turnout was low, with only 58% of Americans showing up at the polls. The battle for President was a bitter one, with both candidates set to make history if they won – Clinton as the first female President, and Trump as the first significant populist to win the White House since Andrew Jackson in the early nineteenth century.
On news of the announcement the dollar slipped, the Mexican peso tumbled, and most Asian markets marginally declined. The Dow Jones plunged 800 points, and the S&P futures market fell 5% before midnight of the elections. Trump’s victory was considered an anti-establishment vote, after Obama campaigned rigorously for Clinton, and set a precedent for the populist tide.
The leader of the centre-left Democratic Party of Italy, Matteo Renzi offered Italians the chance to change their constitution granting more powers to the government to pass legislation. The reform would have reduced the size of the Senate from 315 to 100 and also simplified the process of making laws. Renzi’s downfall came on his promise to resign if the population voted against his reform, therefore, turning the referendum into a vote on his popularity. Italy has had 60 governments in 70 years and has failed to pass many reforms that would improve the economic situation of the troubled nation.
Italians voted 59.1% against the reforms, causing Renzi to resign and resulting in the euro slipping to a 20-year low. The turnout was high for Italy, with 65.5% showing up to vote. The troubled Italian banking system is now in a period of significant uncertainty as investors are worried about the future of Italy’s most troubled bank, Monte dei Paschi di Sienna, which is set to be bailed out.
The vote was seen as a victory for populists in Europe, as the leader of the ‘No’ campaign was Beppe Grillo of the Five Star Movement. If this increasingly popular party gets into power in future elections, they promise a referendum on Italy’s membership in the euro. For now, though, centrist politician Paolo Gentiloni has taken on the role of Italian Prime Minister.
On 15 July 2016, a faction of the Turkish Armed Forces attempted a coup d’etat against President Erdogan. They tried to seize control of Ankara and Istanbul citing a return to Turkey’s secularist and democratic values that Erdogan had allegedly steered away from. The government accused the leaders of the coup of being linked to Fethullah Gülen, a Turkish cleric and businessman from Pennsylvania and further accused the US of harbouring him.
Since the coup, Erdogan has cracked down on the opposition and other segments of the population. 300 people were killed and 2,100 injured. There were 40,000 people detained by the government forces including 10,000 soldiers and 2,745 judges. An additional 15,000 education staff were suspended after the government alleged they were loyal to the Gülen Movement. The coup was condemned by the UN, EU, and NATO, but on 24th November, the European Parliament voted to block Turkey’s accession to the European Union on the back of human rights abuses that followed the coup d’etat.
On October 3rd, voters in Colombia narrowly rejected a referendum on a peace deal with the FARC rebels by only 50.2%. Colombian President Juan Manual Santos and the leader of the FARC Rebels Timoleon Jimenez signed the deal after four years of negotiations. The ‘Yes’ campaign was supported by the President and many political figures across the world including the UN Secretary General Ban Ki-Moon. The former Colombian President Alvaro Uribe led the campaign for a ‘No’ vote and polls were suggesting that they would not take a victory in the referendum.
Voter turnout was surprisingly low with only 38% of Colombia’s population voting on a critical referendum to end the country’s ongoing civil war. The voters that backed the deal overwhelmingly were from regions that were most impacted by the conflict in the north-west of the country. People voted ‘No’ because they felt that they did not want the rebels to get away with murder; those who were convicted of war crimes were allowed lenient sentences according to the deal. The ceasefire between the government forces and rebels will remain in place while President Santos continues to deliver a peaceful deal that his supporters will be content with.
Key political figures of the year
- Donald Trump: the Republican President-elect is a former businessman and was CEO of the Trump Corporations. He rode a populist anti-establishment wave to the White House.
- Nigel Farage: a lead campaigner for the Leave vote and UKIP leader has been a long-time advocate of Brexit and helped secure the UK’s departure from the European Union.
- Hillary Clinton: the first female Democratic nominee for President lost to Donald Trump, although the polls had predicted otherwise. Clinton won the popular vote gaining 3 million more votes than the Republican President-elect.
- Theresa May: was the second female Prime Minister of the UK, gaining the leadership after David Cameron resigned in on 23 June. She will deliver the Brexit negotiations next year.
- Matteo Renzi: took the Italian referendum to a vote on his leadership which inevitably resulted in a landslide vote in favour of his resignation and against his desires for change to the constitution.
- Boris Johnson: one of the lead campaigners of Brexit was named the British Foreign Secretary in Theresa May’s government despite his many outspoken words relating to foreign affairs.
- Narendra Modi: the Indian Prime Minister who delivered the revolutionary demonetisation policy in India recalling cash in an attempt to starve the black market.
- Joko Widodo: the first President of Indonesia to be elected outside of the country’s political and military elite, he has become a symbol of progressive hope for a nation troubled by Islamic extremism.
- Juan Manuel Santos: the Colombian President who negotiated the peace settlement between the government and the rebels which was then rejected by the majority of the populace.
Outlook for 2017
Triggering Article 50
Article 50 of the Lisbon Treaty has never been triggered by one of the 28 member states of the EU. Adopted in December 2009, the Article was put into place to maintain the democratic nature of the bloc. Although the exact timing of the triggering of Article 50 will depend on the outcome of the parliamentary vote, Theresa May has currently set the date as March 2017.
The EU’s chief negotiator gave Britain an 18-month window, and while the law states the process can take only two years, it is likely that the terms of exit will take much longer to establish. The other 27 member states will have the power to veto the conditions, and they will additionally be subjected to national parliaments across the bloc. This means that Belgian MPs could hinder or even prevent the whole process.
The easier half of the process will by untying the treaties that tie British governance to the EU parliament. Establishing a new trading agreement will be much more challenging, as European leaders have made no secret of their ambition to punish the UK to prevent other member states from following in their footsteps and causing the collapse of the entire project.
In November, Angela Merkel announced that she would, in fact, be running again to serve another term as leader of the German Christian Democratic Union (CDU) party and Chancellor of Germany. It is understood that Merkel has lost a significant proportion of her popularity in Germany, particularly amongst right-leaning German states, notably in Bavaria. This stems from her refugee policy during the beginning of the migrant crisis that encouraged many asylum seekers to Germany.
In 2016 alone Germany took over one million Syrian and North African refugee, altering the social structure of the country. Her greatest competition comes from the far-right wing party the Alternative for Germany (AfD) who is looking to destroy the threshold needed to get into the Bundestag and who would take votes primarily from Merkel’s CDU.
This is a critical election for the future of the European Union, as the AfD is very much geared towards the populist movement that has taken Europe and the West by storm throughout 2016. It is expected that Merkel will win the election, although it will be far less of a victory than her initial rise to power. The results will be announced on 22nd October.
The French general election will take place between the April 23rd and May 7th, 2017 and will see the citizens of France choosing to vote between Francois Fillon, the new leader of the Republican party and Marine Le Pen of the far-right and populist National Front party. Both candidates have pursued a hardline on immigration and Islamist terrorism in their campaigns, part of which has helped to propel them to popularity.
Fillon was Prime Minister of France during the financial crisis in 2008 under President Nicolas Sarkozy and was criticised at the time for failing to protect the French economy. Fillion also promises to reform the European Schengen area in order to strengthen France’s borders to protect it from the terrorism that has shaken the heart of the country during the course of the last 18 months.
Francois Fillon hopes to deliver a quick Brexit for the European Union whilst Marine Le Pen, on the other hand, hopes to see through a Frexit, dividing France from its Brussels leadership. “The People’s Spring is now inevitable” has been one of Le Pen’s phrases that has won her much support in France, as the country blames its divided society and Islamist terror on the European Union.
These elections will also cause markets to shudder at the thought of another grave crisis to impact the once stable union, and it will all depend on whether Le Pen can deliver a Trump-like miracle when capitalising on the discontent rooted in immigration and the economy.