Who Runs the World? Girls!
Step forward, Ursula von de Leyen. Little known within investing circles, this German defense minister is the first female President of the European Union Commission, and the woman taking a top job. With the margin between politics and the stock market thinning, investors are eager to hear her proposals for big tech companies, airlines, and Brexit!
The EU Commission is a hive of high stakes political chess, controversially undemocratic but unquestionably influential. National leaders set the day’s priorities, before von de Leyen’s commission puts up the legislature and the budget for those priorities. If the proposal hasn’t been lost in the bureaucratic mire by that stage, it will be pushed through to parliament for a final clearance.
Investors are already speculating about what the new President will do as big tech giant cases land on her desk, knowing she’ll be a key link in any chain of events that goes beyond Europe, and into the investment world.
One of those events will surely be Brexit. As the UK waits to check out of the European Union, its FTSE 100 stock exchange has only tentatively drawn higher. Amid a shuffle at the top of British politics too, investors need the air cleared and the uncertainty put to bed. Saying she’s open for yet another extension cast a silence over the market yesterday, because without decisiveness, both economies could end up down the tubes.
Should that happen, the fallout would land with von de Leyen and her equally new colleague in Brussels, Christine Lagarde. Lagarde’s decisions about monetary policy, such as whether to move interest rates, will be “interpreted flexibly” by von de Leyen, she said. Some in the markets take that to mean she’ll do as she pleases, persevering with punishments on Gazprom, Ikea, and a host of other European trouble-makers, even if a recession bites.
The EU Parliament should have her sworn in very soon, investors on the continent pending their orders until her allegiances are truly revealed.