Reading the annual forecasting jamboree of the media and political elites (the “Pundocracy”) is an illuminating exposure to the worldview of our contemporary Dominant Minority. A common theme is bewilderment about the events of 2016 and a sense that the normal “rules of the game” have been shattered by the victories of Brexit and Trump.
Various reasons have been given for this inexplicable shift from the status quo, ranging from nefarious Russian hacking, the rise of so-called “fake news” media or an up-surge of racist and xenophobic attitudes among sections of the electorate. For a perceptive minority of commentators, there is a dawning understanding that the globalised economic system is under threat by a growing army of economic “losers”, across the developed world.
Those who have read my “winter is coming” post will understand that powerful structural forces, including accelerating climatic change, the peaking of global conventional oil supplies and growing resource and water scarcity around the world are a mega-trend which will shatter the current business-as-usual model over the coming decades. Coupled with the huge levels of debt in the global financial system, the sovereign bond super-bubble and the long-term stagnation of wages across the developed world, it is therefore not surprising that there are growing warnings about the longevity of our globalised liberal world order.
It is in this broader context that I have prepared a series of probabilistic forecasts that I think are likely to occur in 2017. I have tried to make the forecasts as specific as possible and have focused on European politics as this may prove a “game-changing” year for the future of the euro zone and the European Union (“EU”) itself.
Please note that these forecasts will expire on 31 December 2017.
- Marine Le Pen will succeed in getting into the second round and go on to win the presidential election in May (60% probabilistic chance)
Assuming the opinion polls are correct, it is likely that Marine Le Pen of the National Front (“NF”) will succeed in mobilising sufficient support to get into the second round of the presidential elections and should face Francois Fillon of the centre-right conservatives in a second round contest.
There is a risk that Le Pen will be edged out in the first round by tactical left-wing voters and for this reason, along with the polling lag against potential opponents in the second round, I have placed only a 60% probabilistic chance of my forecast coming true.
However, assuming Le Pen passes the first round, the NF leader will most likely go on to narrowly win on the back of a huge surge of support from an increasingly angry army of unemployed youth, the blue-collar industrial working class along with a broad coalition of the middle classes. This will include a middle class “shy Le Pen” vote and the conversion of a section of the nominally leftist public sector workforce on a traditionally socialist and anti-austerity message which promises to protect the bloated public sector from reform and mass redundancies.
The majority of the French populace fear the impact of economic globalisation and therefore will struggle, when the moment comes, to vote for the economically Thatcherite and socially conservative policies of Fillon, which is politically toxic to left-wing voters. Le Pen is very different to her fascistic father and it is likely that her brand of nationalistic, populist and statist politics will resonate with broad layers of the French electorate.
According to Bloomberg, 51% of the French electorate consider security their top priority, hardly surprising considering the wave of jihadi terror attacks that have afflicted the nation over the past few years. Mainstream parties have shifted to the hard-right on security issues and adopted policies once exclusively owned by the NF. Le Pen is a clever, charismatic and forceful political figure who will likely persuade a narrow majority of the French electorate that only she can crush the growing jihadi threat once and for all.
To summarise, I consider it likely that Le Pen should manage to get through to the second round, and if so, has a good chance of defeating her opponent on a platform of using the power of the French state to protect the populace from the impact of economic globalisation and crush the threat from Islamic fundamentalism.
- Geert Wilders of the Party of Freedom will become the biggest party in the March elections in Netherlands (75% probabilistic chance)
Geert Wilders of the Party of Freedom will become the biggest party in the March elections, leading to either political paralysis, becoming part of a coalition government in some capacity or the formation of an anti-Wilders coalition of the other parties.
The growing threat of Wilders to the political establishment has familiar themes to the rise of Donald Trump and the shock victory of the Leave campaign during the Brexit referendum. It may be the case that the centrist parties will succeed in locking out the populists from power this year but it is probably only a matter of time before Wilders ends up in power in the Netherlands.
- The Alternative for Germany (“Afd”) will narrowly beat the Social Democrats into second place in the federal elections (70% probabilistic chance)
The German federal elections, due in the autumn, will see the populist, anti-immigrant and anti-establishment party the Afd narrowly defeat the centre-left Social Democrats into second place with approximately 20% of the vote. Angela Merkel is struggling to unite her political base in readiness for running for a fourth term and it is a possibility that she may withdraw from politics should she fail to develop a common consensus on migration and security issues.
However, assuming that the Pundocracy is correct and Merkel does succeed in getting the conservatives behind her re-election bid, I expect that Merkel will get re-elected but will be an increasingly lame duck leader due to the rising power of right-wing populism in Germany.
- At least one major West European country will elect an anti-Euro government into power (65% probabilistic chance)
At least one major West European country will elect an anti-Euro government into power (most likely candidates France or Italy if the latter has elections this year) which will cause a deepening political crisis in the euro zone.
I have written before on the internal contradictions which have beset the euro zone since its inception in 1999. The original sin of the founders of the euro was the failure to create structures of political and fiscal union across the currency zone and this has ensured that the experiment has lurched from one crisis to another since the Great Recession of 2008/09. European polling reflects a steady and systemic collapse in faith in European institutions, the political leadership and the common currency and at some point these trends will culminate in an anti-euro movement sweeping to power in at least one euro zone member state.
- Deputy Crown Prince Mohammed Bin Salman of the House of Saud will be removed in a palace coup (55% probabilistic chance)
Deputy Crown Prince Mohammed Bin Salman (“MBS”), the leading figure in the Saudi Arabian royal family, has led a bold economic reform agenda which includes a public austerity drive, the proposed selling of a portion of the giant state oil company Saudi Aramco and challenging the traditional social contract with the Saudi populace. Whilst it may be the case that the reforms are sensible and long overdue, in a country with no political democracy, the risks of a public backlash are high.
MBS has also led the way in pushing for a more aggressive foreign policy and has been the public face of the controversial and costly Yemen war against the Shia rebels. Growing concern within royal family circles and the entrenched hostility among the powerful clerical establishment could lead to MBS being removed from power in 2017. There is even a wild card possibility of civil unrest from disgruntled members of the Saudi population which will aggravate a sensitive and dangerous moment for the Saudi Kingdom.
- The sanctions regime against Russia will be eased or ended by President Trump by the end of the year (80% probabilistic chance)
Donald Trump has consistently said that it is in the best interests of America to work with President Putin in areas of mutual interest, in particular, the crushing of ISIS in the Middle East. I therefore consider it very likely that Trump and Putin will meet and arrange a grand strategic reset over the status of Crimea, coordinated military action over ISIS, spheres of influence in borderlands of Eastern Europe and the phasing out of the economic sanctions regime imposed on the Russian Federation by Europe and America.
Trump and his inner circle of advisers consider China the main strategic threat to American interests and wish to align Russia in a global anti-Chinese alliance. There will be entrenched institutional resistance to such a rapprochement from factions within the intelligence and military establishment and I would expect to see a number of high-level resignations from the upper echelons of the CIA as Trump forces through a radical shift in America’s foreign policy.
4 thoughts on “My predictions for 2017”
I think that your ‘predictions’ for the European project are a more optimistic than my assessment,unfortunately I think that Le Pen will have considerable support but that the play of centre left/right factions will pull votes away and leave her a close second,as in the Calais stitch up, the French are by nature a conservative nation,good at national demonstrations but unlikely to commit fully to any ‘extreme’ political alternative well that is my feeling after living for 15yrs in the deep south west which may not of course representative of France ,unfortunately,I feel that the same will occur with Frauke Petry and the Adf,and as we witnessed with Norbert Hofer and the FPO in Austria whom I thought was a racing certainty to romp home in the re elections but he fell just short.
You may be right and I think there is a possibility that Le Pen might not even go past the first round.
However, I do think that the labels of Le Pen as a “extremist” or “far-right” don’t always help. My reading of her politics is on the economy to preserve the statist consensus of a big state, a nationalistic line of identity and security (which Fillon agrees with) and a Eurosceptic position on the euro and the EU. I have watched her closely for months and nothing she has said suggests that she is a fascist or a total extremist. I would place her as a nationalist with socialist economic views which isn’t so far from the mainstream of French public opinion.
Le Pen does face major obstacles in respect to the historically toxic baggage of the NF and her fathers legacy. Whether she can overcome that remains to be seen.
I do have a gut feeling, every time I watch her, that I am looking at the next president of France. Lets see…
Do you think that the world will go into a global recession or at worst global depression during 2017? Who do you think will win the Norwegian election in 2017?
Hi, I don’t think we will enter a global depression during 2017 although it will come sooner rather than later. My hunch is by the end of the decade.
I haven’t given any thought to the Norwegian elections i’ll be honest.