European stock markets boomed yesterday on news of elections in the region. The Ibex broke resistance and hit an inter-year high of 10,687.5 points. The German stock market also broke its yearly ceiling, and Italy's grew more than any other market at 3.61% on the day. Despite the fact that a high number of people abstained when the EU parliament voted, the "euroskeptic" contingency is growing and the traditional political parties have won a scathing victory, the market is optimistic.
This result signals better stability in the region. Both the Peoples Party and Social Democrats, modeling themselves after German counterparts, will attempt to unify the region politically and economically. For the people who don't want unification, the solution is more Europe. The triumph of the Merkel model assures that reforms will continue across Europe after public sacrifice has helped build economic strength. Investors know that Renzi has his hands free to finish reforms in Italy and that the Germans are going to keep pressing the peripheral countries, including Spain, to finish theirs, too.
Unlike France, who is experience serious unrest within its borders, Germany holds the reins in Europe because its social and political machine is strong and cohesive. The nation's EU representatives need to bring this stability to the European Parliament if they want to region to heal.
