<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>A new wave of extreme right-wing political parties entered the European political scene both on the national levels and the European supra-governmental level sparking fears about the rule of law among investors and policymakers. The European Parliament’s elections scheduled for June 2024 are seen as a crucial turning point in the continent's political landscape. Using a mix of OLS regressions and event study, this paper analyzed how stock markets and bond markets reacted to European elections. The results show that the incumbent government's fiscal record appears to influence its re-election chances in developing countries and markets price weak fiscal balances around elections. The paper assessed how government bond markets reacted to the EP’s elections rounds of 2014 and 2019. These rounds of elections have been dominated by the political parties with cantered-orientated ideologies which may not be the case for the next round of elections in 2024. The results show how EP’s elections stabilized bond markets, especially in countries with weak macroeconomic fundamentals. The results emphasize the intricate relationship between fiscal policies, political events, and financial market behaviour. Investors, policymakers, and governments should consider these findings when assessing electoral and market dynamics, particularly in the context of the upcoming 2024 European Parliament elections.</p>
</abstract>

A new wave of extreme right-wing political parties entered the European political scene both on the national levels and the European supra-governmental level sparking fears about the rule of law among investors and policymakers. The European Parliament’s elections scheduled for June 2024 are seen as a crucial turning point in the continent's political landscape. Using a mix of OLS regressions and event study, this paper analyzed how stock markets and bond markets reacted to European elections. The results show that the incumbent government's fiscal record appears to influence its re-election chances in developing countries and markets price weak fiscal balances around elections. The paper assessed how government bond markets reacted to the EP’s elections rounds of 2014 and 2019. These rounds of elections have been dominated by the political parties with cantered-orientated ideologies which may not be the case for the next round of elections in 2024. The results show how EP’s elections stabilized bond markets, especially in countries with weak macroeconomic fundamentals. The results emphasize the intricate relationship between fiscal policies, political events, and financial market behaviour. Investors, policymakers, and governments should consider these findings when assessing electoral and market dynamics, particularly in the context of the upcoming 2024 European Parliament elections.

European Elections and Financial Markets: Navigating Political Winds and Market Reactions

National University of Political Studies and Public Administration

Proceedings of the International Conference on Business Excellence

This work is licensed under the Creative Commons Attribution 4.0 International License.

A new wave of extreme right-wing political parties entered the European political scene both on the national levels and the European supra-governmental level...

European Elections and Financial Markets: Navigating Political Winds and Market Reactions

Data publikacji: 03 lip 2024

Zakres stron: 2526 - 2536

DOI: https://doi.org/10.2478/picbe-2024-0212

Słowa kluczowe
elections, European elections, financial markets, bond markets, fiscal policy, macroeconomics, regressions

© 2024 Andreea Stancea et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

European Elections and Financial Markets: Navigating Political Winds and Market Reactions

Data publikacji: 03 lip 2024

Zakres stron: 2526 - 2536

DOI: https://doi.org/10.2478/picbe-2024-0212

Słowa kluczoweelections, European elections, financial markets, bond markets, fiscal policy, macroeconomics, regressions

© 2024 Andreea Stancea et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Słowa kluczowe
elections, European elections, financial markets, bond markets, fiscal policy, macroeconomics, regressions