2014 has been a calm year for Europe after the late 2013 ECB intervention.
All could change in 2015, where Europe could literally sleepwalk in the next crisis.
This year there are Greek election (happening the 25th January…with the Anti Euro Syriza ahead in the polls) and then later also Spain and Portugal. Also the UK will have elections and probably PM Cameron will have to hold the Yes/No referendum of Europe membership.
Greece is also closely watched by the other Southern Europe countries to see what happens if the limits are pushed.
The predictions is that the anti EU parties will get traction.
Naturally the European Central bank will try to sooth the market – maybe even trying some version of European Quantitative Easing (it is much more difficult to make everyone agree to a full blown QE than in the US or Japan). But it will be harder for the ECB to bluff its way out of the position.
On top of this, with the recent terrorist attacks, there is an increase nationalism / Islamophobia that aggravates the situation.
In France there are no elections, but if the Government falls the Front National of Marine Le Pen could spell the end of the European Union as we know it (the French election are due in 2017). The last European revolution started from France!
On top of all this there is also Russia. I think the Russian issue will simmer on the sidelines and the Europeans (specially Germany) will try and rebuild some form of civilised relationship as an implosion of Russia could be very destabilising or even could push Russia to some very aggressive moves.
So investors will have to look again closely at Europe this year.
investorpolitico 