Anthony Rowley

Macroscope | A world exasperated with the West may well seek leadership elsewhere

Recent UK and French election results and US turmoil are creating an impression of political and societal instability

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Demonstrators rally against the far-right after France announced first-round election results, at Place de la Republique in Paris on June 30. The election has left France politically divided. Photo: AFP

Anthony Rowley

Published: 4:30pm, 13 Jul 2024Updated: 5:44pm, 13 Jul 2024

Is Europe shifting politically right or left, and how far will the pendulum swing towards extremism in either case? Is the United States headed for a political gridlock – or even civil war? These are serious questions in the light of recent developments on both continents.

An even bigger question, however, is how much the world cares, if any more, about the irresponsible antics of these so-called great powers, or whether it is ready to cry a plague on both their houses and look elsewhere for leadership.

The erosion of confidence in a nation does not usually happen overnight. It tends to be more of a glacial process that finally accelerates into a meltdown. We are arguably at this point with regard to global perceptions of the US and Europe.

Leaders on both continents are brawling publicly and challenging one another’s integrity, which hardly serves to reassure cynical electorates that anyone among them is fit to lead – a situation that invites anarchy and extremism.

This nascent chaos is manifesting at the political level and it cannot be much longer before it breaks into the open at the economic level too, affecting global trade, investment, currencies and the financial markets. The dollar is under a uniquely serious threat from all this, which in turn poses a threat to the multitude of countries that use the US currency as their principal foreign reserve asset or store of value, not to mention as a currency for international trade transactions.

What we are seeing in the US – and are almost certain to go on seeing at least until the presidential election in November – is a threat to the credibility of the dollar of a different magnitude to the periodic threats by Congress to “shut down” the government over deficit spending spats.