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Eurozone political calendar 2017 4 December: Italian constitutional referendum Our base case is a close “No” vote where Renzi stays and no snap election, given current polls and the outstanding electoral reform court case. BTPs and the banks recaps remain a tail risks for the Italian economy, although the ECB extending QE should help. A big “No” vote would boost Five Star and undermine Renzi into 2018 elections, in our view. 4 December: Austrian presidential election Polls by public broadcaster ORF show the result as very close. Norbert Hofer is standing on an anti-immigrant platform against the moderate former Green leader Alexander Van der Bellen in a rerun of the May vote. The election of Freedom party candidate Norbert Hofer would make Austria the first nation to elect a head of state running on a far right platform since the EU began. 22/ 29 Jan: French Socialist Party presidential nominee elections If President Francois Hollande decides to run for re-election as the Socialist Party candidate (decision expected Dec 10th) he could be challenged by former Prime Minister Manuel Valls and Economy Minister Arnaud Montebourg. Current second round polls for any combination of these candidates suggest likely Socialist nominee too close to call. 15 March 2017: Dutch elections Prime Minister Mark Rutte currently leads a “purple” coalition with the Dutch Labour party as main second party. But the latest polls suggest both parties could win fewer seats than they have now in 2017. That could make it more challenging to build a government given the need to secure at least 76/150 seats. In terms of who could lead that coalition, polls have Rutte’s People’s Party neck and neck with the anti- immigrant Freedom party led by populist Geert Wilders. Wilders has called for the Netherlands to leave the EU indicated he would call a referendum if elected. A Wilder-Rutte coalition also hasn’t been ruled out according to press reports. 23 April: French first round presidential elections The first round of voting for the next French president will be on 23 April. First round polling suggests the leader of the anti-EU Front National Marine Le Pen is expected to progress to the decisive runoff. At present Republican Candidate Francois Fillon is also expected to make it through. 7 May 2017: French second round presidential elections Current polls, albeit their validity has been called into question by events in 2016, show Fillon securing 65-70% of the vote vs Le Pen in a runoff (see chart below). We note that when her father, Jean-Marie Le Pen, faced Jacques Chirac in the 2002 Presidential elections the FN candidate only received 18% of the vote. Nevertheless, we see a potential Le Pen win as the biggest political risk event for European (and possibly global) equity markets in 2017. By 22 October 2017: German Federal elections Current Chancellor Angela Merkel has announced that she intends to stand for re- election. Current polls have Merkel’s CDU ahead followed by SDP with the euro- sceptic Alternative fur Deutschland, Greens and Die Linke competing for third spot. While it may be necessary for Merkel to maintain the grand coalition with the SDP, our central case is that we see a continuation of the current German administration and that German elections carry less risk than the earlier French presidential elections. Bankof America Merrill Lynch European Equity Strategy |O1 December 2016 15 HOUSE_OVERSIGHT_014474