​​​​​​​European economic risks primer: Richlandia and Poorlandia

The potential breakup of the euro has been a permanently armed grenade under the bed of the global economy for almost two decades. The recent Italian elections driving yields up and the euro down reminded allocators that European risks have never really dissipated. Every time a eurozone election goes the way of populists, threats to the cohesion of the group increase and the discipline required to maintain the monetary union becomes harder to sustain. Meanwhile, the euro’s status as a global reserve currency is constantly undermined.