Editorial - May 2024

Edito

Temps de lecture : min

Screams in the night

The European elections are approaching. The background against which the elections are taking place is very different from the previous elections. 

You may remember that the previous elections were held in May 2019. There have been so many changes and crises since then! At the time, Europe was preoccupied with the consequences of the 2016 referendum on the UK’s membership. The victories of eurosceptic governments in Hungary, Poland, Austria and Italy were also a subject of significant concern. The elections also took place soon after the 2015 climate agreement, which offered so much hope for people and the planet. 

They were held only five years ago but that period feels much longer. Another world... another Europe? Successive crises have occurred during this period, such as Covid, wars close to Europe and/or slightly further afield (Middle East), resulting in profound changes in the procurement markets in European companies. Geopolitical power relationships have shifted: US/China; Europe/Russia; West/BRICS; developed/emerging countries. The watchword is preserving sovereignty, protecting oneself against the enemy, whoever that may be, even if the identity of the enemy is not always defined.

« And what about the climate? Who knows? »

.

Yes, the Chinese are investing heavily in electric vehicles and are importing and storing huge quantities of materials to be used in the energy transition. But, for China, the climate seems to be more a means of wielding economic power and increasing export capacities.

Yes, the US passed the IRA. But no one is fooled. Although the investments being made are, once again, huge, the aim is to protect economic sovereignty, rebuild American industry on home soil and stand in China’s way in the race for global economic supremacy.

Europeans seem lost in this world with few resources, high energy costs, European defence forces that are understrength and companies that prefer to invest abroad. 

Let there be no mistake. Many observers are aware of the challenges and weaknesses. “Screams ring out in the night”

But the strategy is struggling to take shape. We are reminded of the single European capital market project (a 10-year-old plan that has never reached fruition). The anti-competitive practices of the Chinese are being pointed out and import taxes are being considered while, at the same time the German Chancellor is courting his Chinese partner. A European defence force is called for, but we are relieved that the US Senate voted in favour of extended support for Ukraine.

Never has a European election been so important for the future of Europe. But its institutional system makes it complex, since the European Commission, an unelected political body, is the true executive body - an operating structure that represents another challenge for Europe in its desire to assert itself.

“In the night, he listens. And only the sound of his own voice comes to him, screaming in frustration” Jim Gordon

Written by

Lucile LOQUÈS
Director of the International Actions division

May 14, 2024

Covéa Finance, a portfolio management company of the MAAF, MMA and GMF groups with share capital of €24 901 254, incorporated as a single-person simplified joint stock company, registered with the Paris Trade and Companies Register under number 407 625 607 and approved by the French Financial Markets Authority under number GP 97 007. This document is produced for information only and cannot be considered as an offer to sell or investment advice. It does not constitute the basis for any commitment of any kind, nor a strategy assessment or any recommendation to invest in financial instruments. It contains general and non-personalized opinions and analyzes designed by Covéa Finance on the basis of figures that it considers reliable on the day of their establishment depending on the economic context, but the accuracy and validity of which are however not guaranteed. The views expressed in the document are subject to change without notice. Covéa Finance cannot be held responsible for any decision taken on the basis of information contained in this document. This document is the intellectual property of Covéa Finance. Any Use (defined below), reproduction or distribution of all or part of this document must be subject to the prior authorization of Covéa Finance. The recipient of this document is aware of and accepts that the quantified data, allowing the establishment of general and non-personalized opinions and analyzes, may be subject to the acquisition of rights vis-à-vis third parties. Therefore, the encrypted data may under no circumstances be the subject of any use by the recipient of the document without the prior acquisition of the necessary rights directly from the third party holders of these rights. Furthermore, the recipient of this document is aware and accepts that Covéa Finance will in no way be responsible for any use made of said encrypted data and will alone assume all the consequences vis-à-vis third parties who hold the rights associated with this data. "Use" is understood as, and without limitation, the manipulation of encrypted data, distribution, redistribution, integration into an information system or into documents of all types.