The boss of a pro-European investment firm has said that UKIP winning the European election will have no impact on markets because the party is just a “protest”. Stuart Mitchell from SWMC European Fund also said the debate had not started “in a serious way in the United Kingdom about Europe” and it was for David Cameron to present the pro-European case.
Mr Mitchell was being interviewed by the far-left Morning Star Newspaper, as part of a series about investments. He was asked if UKIP winning the European elections would damage financial markets, Mitchell explained that his team did not think so because UKIP was “a kind of protest, anti-political thing”.
He said: “We don’t believe the debate has really begun in a serious way in the United Kingdom about Europe and in our view it’s very much Cameron is to win to present the pro-European case at some stage, as long as he can get some kind of rewriting of the boundaries and perhaps some kind bring back at par to the U.K. But I think that – the serious debate hasn’t yet happened.”
So far pro-Europeans have tried to claim that leaving the EU would damage financial markets and cost three millions jobs. However, this intervention is a pre-emptive rebuttal that will that will enable pro-Europeans to explain why a UKIP win has not damaged markets in the way one would expect.
By claiming that no-one believes that a UKIP win is a serious step towards independence one can explain how there was no damage to markets, but also maintain that there would be if independence was a serious option. The implication is that a UKIP win is not a serious step towards independence anyway so investors will not be rattled by it.
Eurosceptics across the political spectrum take the alternative view that markets would be comfortable with leaving the EU and that is why the UKIP surge is not leading to a steep fall in share values.
As the referendum on Europe gets closer the pro-Europeans will want to persuade the public that they will suffer serious economic harm if they choose to leave. In order for this narrative to work they must be able to explain why the UKIP win did not cause a mini-crash.
The narrative would be blown apart of the markets improved following a UKIP win. This could happen because leaving the EU will reduce the regulatory burden on the City of London and eliminate the risk of a Europe wide Financial Transaction Tax.