It's The "Most Volatile" Year For Political Risk Since World War II

Tyler Durden's picture

"In 2017 we enter a period of geopolitical recession," warns Eurasia Group president Ian Bremmer, adding that international war or "the breakdown of major central government institutions" isn't inevitable, though "such an outcome is now thinkable." In the company's 19th annual outlook, Eurasia fears that U.S. unilateralism under Donald Trump, China’s growing assertiveness and a weakened German Chancellor Angela Merkel will make 2017 the "most volatile" year for political risk since World War II.



As Bloomberg reports, the warning is a reminder of the range of threats to stability in 2017, from elections in Germany, France and the Netherlands and Britain’s planned exit from the European Union to setbacks in emerging nations such as Brazil and refugee crises.

With Trump’s ascent to the presidency on an America First platform, the global economy can’t count on the U.S. to provide “guardrails” anymore, according to Eurasia, which advises investors on political risk. Trump’s signals of a thaw with Russia, skepticism toward the North Atlantic Treaty Organization and his “alignment” with European anti-establishment parties such as France’s National Front could weaken the main postwar alliance protecting the global order, according to the report released Tuesday.


You could see an environment that geopolitically is by far the worst that we’ve experienced in decades in 2017 and yet the investment into the U.S. markets and the strength of the American dollar is going to grow,” he said in a Bloomberg Television interview.

In China, a scheduled leadership transition makes it likely that President Xi Jinping will be “more likely than ever to respond forcefully to foreign policy challenges,” potentially leading to spikes in U.S.-China tensions, according to Eurasia. To maintain domestic stability, Xi might “overreact” to any sign of economic trouble, leading to a risk of new asset bubbles or capital controls, Eurasia said.

Merkel, who is seeking re-election in the fall, faces likely disputes over Brexit, Greece’s simmering debt crisis and an “increasingly authoritarian” Turkish President Recep Tayyip Erdogan, threatening a refugee accord between the EU and Turkey.

“Despite just how wrong the polls have been in recent major electoral contests across the developed world, Merkel will win a fourth consecutive term,” the report said. “But the need to appease domestic critics this year will leave her a diminished figure, impacting the quality of her leadership both at home and in the EU.”

Other risks cited by Eurasia include:

  • Lack of economic reforms, with only China on a “positive trajectory” among 14 major nations and Italy, Russia, Saudi Arabia, South Africa, Turkey and the U.K. declining.

  • Politicians blaming central banks, including the Federal Reserve, for economic woes. Such attacks mark “a risk to global markets in 2017 by threatening to upend central banks’ roles as technocratic institutions that provide financial and economic stability.”
  • A “witch hunt” against parts of the opposition in Turkey, even tighter control over government and the media by Erdogan, and pressure on the Turkish central bank to keep rates low and rely increasingly on fiscal stimulus to offset slowing growth.
  • North Korea’s nuclear program, which may yield some 20 nuclear weapons, combined with technological advances allowing strikes at the U.S. west coast in the future.
  • National Front leader Marine Le Pen winning the French presidential election is the biggest political risk in Europe, where EU ties and the euro area are “in a process of gradual, slow-motion disintegration,” New York University economics professor Nouriel Roubini said on Bloomberg Television. “If Le Pen comes to power in France, if an anti-euro party comes to power in Italy, this could be the beginning of the end of Europe and the euro zone,” he said.

Eurasia concludes...

This year marks the most volatile political risk environment in the postwar period, at least as important to global markets as the economic recession of 2008. It needn’t develop into a geopolitical depression that triggers major interstate military conflict and/or the breakdown of major central government institutions. But such an outcome is now thinkable, a tail risk from the weakening of international security and economic architecture and deepening mistrust among the world’s most powerful governments.

Full Eurasia Group Report below...

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Lordflin's picture

These people can't help themselves can they... got to regain the narrative. You know where he can shove this analysis...

GraveDancer's picture

Obama is the outgoing Chamberlin; Trump is the incoming Churchill; Putin is Stalin!

Book> The Road to World War III: "Can the dark forces of anti-freedom "Trump" humanity?"


beavertails's picture

Pizzagate bitchez!

beijing expat's picture

There is only one risk and that the scumbag war criminals this propaganda was written in support of manage to keep Trump out of office.

That is the big risk.

WTFUD's picture

Hope we haven't seen the last of Hillary, although i suppose her Donations, er Kick-backs have all but dried up.

Give credit where credit's due though. On her return from Bosnia under sniper-fire she did a gee-up tour for the troops in Afghanpoppystan. As she did the rounds a renegade Afghan Interpreter tossed a grenade into the crowd. Everyone hit the deck bar Hillary who moved swiftly 2 metres to her right, picked up the grenade and shoved it right up between her thighs. Only God knows how many potential casualties she saved that day and what's equally impressive was the whole unit banged her . . . . she made love all night.

WHAT A CUNT, literally.

skank's picture

"Spread love everywhere you go. Let no one ever come to you without leaving happier." - Mother Teresa

OverTheHedge's picture

Odd - I heard the very same thing from a pole-dancer named Amber.....

Scrubbing Bubblez's picture
Scrubbing Bubblez (not verified) Jan 4, 2017 11:01 PM

A lot of the problems would stop if a certain very evil, inbred (((Tribe))) would disappear!

quax's picture

Inbreeding leads to a lower overall IQ, you may want to re-think you favorite anti-semitic smear.

Rubicon727's picture

"Bloomberg reports...."

Enough said. Some of the very people who initiated this NEW liberalization: NEO-LIBERALSIM that's causing untold misery around the world. What asses they are. Myopic, greedy little SOBS.

quax's picture

If  you need Ian Bremmer to tell you that you haven't been paying attention.

CheapBastard's picture
Laura Ingraham - Screw What Barack Obama Says 'We Don’t Want Them In Your Country'
DOGGONE's picture

Where do they want you to keep your head?
Kept unseen is

Codwell's picture

Merkel winning ? China on a positive economic trajectory ? Keep that fucking crackhead away from the keyboard. He has fried his last brain cell.

OverTheHedge's picture

This does seem to be fairly mainstream thinking: Chime moving ahead politically, whilst all other western countries (esp UK) moving backwards. Exactly. This point of view does seem to go against the group-think here, and probably out in the real world, too. I think that the author is going to be very depressed by the end of this year.


GraveDancer's picture

Obama is the outgoing Chamberlin; Trump is the incoming Churchill; Putin is Stalin!

Book> The Road to World War III: "Can the dark forces of anti-freedom "Trump" humanity?"


TeraByte's picture

Was there listed in their report TOP RISKS 2016:
ISIL terrorists attacks in Europe
Eurasia group lacks a touch of creative thinking. Unprecedented things tend to happen and already a plausible Paris style attack in Germany with two zero casualties would be a major game changer this year, not to mention Trump´s economic policies global impact.

Escapeclaws's picture

The article is right that there is a huge risk concerning Le Pen. However, its interpretation of that risk is wrong.

The risk is that she will NOT become president. If that happens, France is cooked.

Let us hope that the self-hating Germans do not elect Merkel.

DEMIZEN's picture

Seriously, you have to be retarded to be looking to buy at the top in these hotspots unless you have some insider info about annual inflation hitting over 20% in next few years.

The circular flow is broken and need a fundamental fix.

beijing expat's picture

These risks are only of concern to the Oligarchy. The sooner their world burns the better.

esum's picture

NWO VIEW.... oh so scary

REALITY... jobs come back, money comes back, taxes go down, wall goes up, USA does well... no more muzzies, of world..??? EU... finito / China status quo and develop internal market to take up USA slack  Mexico has a cartel revolution, Russia continues as a commodity country and goes after the ISLAMIC JIAHDIS WITH THE USA... NO RESTRICTING ROEs.... FOR REAL THIS TIME .... the russians calmed the chechnyans down...right?? 

what the left portrays as the trump agenda is exactly what he wants the guy sitting on the other side of the table to perceive..fear