The eurozone crisis in 2017 enters its eighth year and issues are bubbling away that could turn into existential threats to the area. Among these potential market-moving crises, Italy’s banks are fragile to the point of systemic default, perhaps more so now that political uncertainty has intensified. Elections are due to take place this year in France, Germany and the Netherlands that could place populists in powerful positions. The biggest menace would be victory for the National Front’s eurosceptic Marine Le Pen in the French presidential election because she wants France to quit the euro. The eurozone’s current-account imbalances, the true source of the eurozone debt crisis, are worsening and aggravating politics. The eurozone’s economy is souring politics because it is as sluggish as ever, while government debt is at record and worrying levels. Investors need to be aware that these problems could morph into crises that could gyrate global financial markets, perhaps suddenly. (VIEW LINK)
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