Morgan Stanley analysts have said whatever its result, the UK’s referendum will likely boost populism across Europe.
Analysts from the financial services corporation have argued that a vote to leave the European Union (EU) will embolden populist parties. They cautioned that even with a Remain vote, however, the “voter backlash” against established parties is likely just beginning.
The Morgan Stanley team remarked: “The political fragmentation that currently manifests itself in an increasingly populist debate about the UK’s EU membership is neither limited to the UK or Europe nor is it likely to dissipate quickly, we think.
“In our view, the voter backlash against established political parties and international institutions is only starting.”
Noting France, Germany and the Netherlands have elections in the next year or so and that Italy has an upcoming referendum, the analysts pointed to a rising tide of populism in all four nations.
In the Netherlands, Geert Wilders’s anti-Islamisation Party for Freedom enjoys growing support while in France, Front National’s Marine Le Pen leads presidential polls.
In Italy, Rome has just elected Virginia Raggi its first female mayor, cementing the anti-establishment Five Star Movement’s position as the major opposition to the governing centre left party.
Germany’s regional elections in April saw the anti mass migration Alternative for Germany (AfD) party record double digit support at the first elections they stood in all regions.
Earlier in the year, the Netherlands voted decisively “no” in a referendum that was seen largely as a bellwether of approval for the EU.
The Morgan Stanley team said a Leave vote in Britain would encourage citizens to believe their votes can actually effect change, leading to growth in support for populist parties. “In our view, the voter backlash against established political parties and international institutions is on the rise,” the analysts commented.
Morgan Stanley emphasised, however, that the “political discontent” felt by many Brexit voters won’t go away however the country votes. They said:
“A UK vote to leave the EU would clearly cause protracted political uncertainty for the UK and for Europe more broadly.
“But a vote to remain — which remains our base case — might still leave us with a deeply divided nation, divisive UK politics, and a hesitant European Union.
“What’s more, in our view, the political discontent that is being displayed around the public debate about Brexit is deep-rooted and likely to be echoed elsewhere.
“The political fragmentation that currently manifests itself in an increasingly populist debate about the UK’s EU membership is neither limited to the UK or Europe nor it is likely to dissipate quickly, we think.”