Election spotlight turns to Europe and Canada in 2025

THIS year may have been the biggest 12 months for elections in living memory with billions of people going to the polls. However, 2025 will also be a corker too, with ballots shaping economic and politics into the 2030s, especially several pivotal ones in the G7.

Little wonder that markets are already looking ahead to these eye-catching events. Perhaps the key question is whether, in the G7 and beyond, 2025 will be another year in which incumbents face the wrath of the electorate. The balance of evidence indicates that this may be “yes”.

Regardless of time and place, voters tended to disrupt the status quo in the last 12 months, including in the United States and the United Kingdom, which saw the challenger Republican and Labour parties, respectively, win power. Meanwhile, established parties in Japan, plus also India and South Africa in the Brics club, saw their electoral mandates slashed.

While each country has its own uniqueness, there were a number of common factors in what has become one of the biggest ever anti-incumbent backlashes. These issues include significant economic and political insecurity brought about by the pandemic, inflation, and – in Europe – the largest conflict in the continent since the Second World War.

In 2025, elections will be held across time zones and geographies, including Belarus in January; Ecuador in February; Australia at dates to be confirmed before September; Gabon and Bolivia in August; Argentina and Tanzania in October; and Honduras in November. Yet the most systemically important ones may be in the G7 nations of Germany in February; Canada’s which will come before November; and, in all likelihood, a ballot in France as soon as summer.

All these G7 events may be big “change” elections. On Feb 23, Germany faces a ballot likely to sweep Chancellor Olaf Scholz from the nation’s top job.

Even before the Dec 20 Christmas market atrocity, Germany had been facing a potentially era-defining election in the new year. Yet, the attack has darkened the political mood further.

To be sure, Germany has faced tough times before. However, the country is today facing what may be the broadest range of economic and political stress in the post-Cold War era – at the same time that neighbouring France is facing major uncertainty too.

The challenges for Germany only grew with the Christmas market attack in Magdeburg. While the exact motives of the Saudi-born doctor who perpetrated the evil act may not be certain for some time, it is already clear the chilling incident has raised the profile of immigration and security in the campaign.

The chief political beneficiary may prove to be the far-right Alternative for Deutschland (AfD), the party that Tesla CEO Elon Musk declared recently is the only one which “can save Germany”. The AfD campaigns heavily on immigration, an issue which has grown significantly in prominence in Germany in recent years.

The AfD, currently second in national polls, is the first far-right group to have Bundestag seats for some six decades. Moreover, it became earlier this year the first such party to win any statewide ballot, in Thuringia, since the Nazi era.

The AfD’s political star is therefore rising, even though it will probably not be part of the next German government. This is because other key parties have said, at least to date, they will not form any coalition with it.

The AfD’s growing success underlines the fracturing of the nation’s polity. This has seen the breaking down of the traditional duopoly of power of Scholz’s left-of-centre Social Democratic Party and the right-of-centre Christian Democratic Union (CDU)/Christian Social Union (CSU), formerly led by Angela Merkel, which have been the twin pillars of German politics since 1945.

Yet, while there is clear desire for political change, the timing of February’s election may prove suboptimal for the German national interest. While it looks likely that the CDU/CSU bloc – led by former corporate lawyer Friedrich Merz – will win the most votes, it will probably need one or two coalition partners.

This may mean it could take months before any final coalition deal is agreed, perhaps not till summer 2025. And in the process, the party’s reform programme will be diluted.

Germany could therefore have a weak, caretaker government led by Scholz for months after Feb 23. And this at the same time that it faces key international challenges from the future of the Ukraine war to responding to potential economic tariffs from Donald Trump’s second administration.

In France, meanwhile, there is a growing possibility of new legislative elections as soon as the summer. On Dec 23, the fourth prime minister to take office in 2024, Francois Bayrou, officially announced a new government, amid growing questions about whether President Emmanuel Macron will see out his final term of office to 2027.

The primary cause of France’s 2024 turmoil stems from Macron’s huge, failed gamble in June when he dissolved parliament much earlier than needed. He calculated that voters would back his centrist coalition.

However, last summer’s vote saw the lower chamber fragment three ways between the leftist New Popular Front coalition, centrists and the populist right of National Rally. There is still no clear-cut pathway out of this polarised political landscape, so it is possible that Bayrou’s prime ministership may not last until the summer, which is the earliest that Macron can call a fresh ballot.

Canada is also likely to see political change in 2025 after around a decade of the Liberal Party prime ministership of Justin Trudeau, a longstanding centrist ally of Macron. Indeed, there is a growing possibility that Trudeau may be forced to resign as prime minister, prior to the 2025 ballot, amid a potential confidence vote in the legislature in January. This follows the recent resignation of finance minister Chrystia Freeland, previously a long-standing ally of Trudeau.

With elections required before November because of Canada’s electoral rules, one recent Ipsos poll put the Liberals under Trudeau’s leadership over 20 percentage points behind the Conservatives. So even if Liberals change leader before the ballot, there is a significant chance that Conservative leader Pierre Poilievre will become the next prime minister.

Amid the political and economic uncertainty that 2025 will bring, the outcome of these high profile ballots in key G7 nations is still not yet 100 per cent clear-cut, despite the anti-incumbency backlash. However, whatever their precise outcome, what is certain is that the elections will not just shape domestic politics and international relations, but also the wider global landscape, in the decade ahead.

The writer is an associate at LSE IDEAS at the London School of Economics