Europe’s still volatile political landscape represents the top global risk of the new year, according to the Eurasia Group’s
Top Risks for 2015
According to the political risk consultancy, friction among countries in the eurozone is worsening. Ian Bremmer and Cliff Kupchan, president and chairman respectively of the Eurasia Group, said that while Europe’s economy is in much better shape than during the height of the eurozone crisis, its political situation is much worse for wear.
“The best case for Europe,” the report states, “would be Germany, France, and the UK working together to provide leadership.” However, the authors regard this outcome as unlikely in the current environment; mainly because Germans are generally happy with the status quo and determined to pursue austerity measures over economic stimulus.
The report cites growing scepticism over the benefits of membership in the European Union (EU) from a range of political movements that are having an impact on established parties. The authors point to the left-wing, anti-austerity Syriza party in Greece, which is well-positioned to win a snap general election later this month, and the possibility of the left-wing Podemos party, which also opposes austerity measures, winning a general election in Spain.
In addition, the Russian crisis will likely continue to escalate, the threat from Islamic terrorism is greater for Europe than any other region outside the Middle East, and the US-Europe relationship is deteriorating, the report suggests.
With Europe’s continued struggle without the likelihood of a strong state to lean on, Bremmer and Kupchan predict that there will be “bigger headline crises in a geopolitically tumultuous 2015.”
However, Bremmer said that he and his colleague aren’t generally pessimistic. They also believe that the risk of instability for oil-exporting states is overblown, Asia nationalism is unlikely to become a problem, and while ISIS is a threat to surrounding areas, they expect it to lose ground militarily in the Middle East.
Details of what the group regards as the ‘top 10’ risks for 2015 can be accessed
Forecasts for 2016-2020 place Africa as the second fastest growing region in the world (at a compound annual growth rate (CAGR) of 4.3%), just below Emerging Asia.
A recent Gallup poll found that respondents identified the 'economy in general' as their biggest concern.
Sentiment in the financial services sector deteriorated in the three months to September, as firms digested the challenges of lower interest rates and the uncertainty caused by the vote to leave the European Union (EU), according to the latest CBI/PwC Financial Services Survey.
However, a London summit on the industry’s introduction of the technology cautions that testing and acceptance are still at an early stage and firms should proceed with caution.