The EU could be on the verge of disaster.
A series of political elections will be held in 2017, with many to
be fought on lines of ‘for’ and ‘against’ membership of the euro. For
the first time since its inception in 1957, the European Union cannot
afford to take its future for granted.
Why?
Economic output in the region has been dire for almost 20 years.No one pretends the single currency hasn’t contributed to the malaise.
As a response to the continent’s sovereign debt crisis, the
European Commission set up the ‘S0’ Indicator – to analyse a country’s
economic data.
In February this year, a report from Deutsche Bank warned that,
according to the S0 indicator, SIX EU member states are now a financial
concern. Its conclusion is especially worrying:
“Even if impending fiscal crises are signalled correctly, there
might not be enough time left to counteract the critical developments.”
This is like having an earthquake warning system in place… but with no means to evacuate.
Make no mistake about it: this is an urgent matter – and your
money is at stake. As I will explain in this letter, unless evasive
action is taken now, British savers and investors will not avoid the
fallout of any European crisis.
Poor economic performance invariably manifests itself politically.
That makes this year a critical juncture for Europe’s future. And it will play out as the following elections take place:
France – 7th May: The far-right Front National party is the
second favourite to win the Presidential election, and is avowedly
anti-EU. Its leader Marine Le Pen plans to reintroduce the Franc. Even if they don’t win, they are still pulling France in an increasingly anti-EU direction.
Italy – by April 2018: General election called after pro-EU PM Matteo Renzi was comprehensively defeated on 4th December 2016 in a constitutional referendum. Italy’s three opposition parties are in favour of leaving the euro, which they believe is preventing the country’s economy from growing.
Germany – by October: Angela Merkel’s CDU party has been
losing seats to the anti-EU AFD. While unlikely at this point, a Merkel
defeat would be the biggest possible blow to the EU’s future. Germany is
the continent’s biggest economy.
The countries listed above are the three biggest economies in the
Eurozone. If one of them voted to leave the euro or the EU, it would
almost certainly precipitate the end of the European Union.
But the potential dangers do not end with them.
Hungary – by Spring 2018: The popular current Prime Minister
Viktor Orban has incurred the wrath of the EU by erecting wire borders
around the country – in defiance of the EU, which he openly disparages.
If just one of these countries left the EU, the financial strain
would be immense. The whole project would be called into question.
Britain has already left. Should another nation follow… it would be like
a theatre filling up with smoke – how long before it becomes a rush to
the exit?
