From a weakened trans-Atlantic alliance to an increasingly fractious Middle East
by Ian Bremmer • Time
At the beginning of each year Eurasia Group, the political risk consultancy I founded and oversee, publishes a list of the top 10 political risk stories for the 12 months ahead. These are the risks and trends we believe are most likely to move markets in 2016. We’ve opened the year with a serious spat between Saudi Arabia and Iran, and a horrible day for markets in China. But our #1 risk centers on erosion of the partnership that has provided a lot of global stability over many years.
1. The Hollow Alliance
The trans-Atlantic partnership has been the world’s most important alliance for nearly seventy years, but it’s now weaker and less relevant than at any point in decades. The U.S. no longer plays a decisive role in addressing any of Europe’s top priorities. Russia’s intervention in Ukraine and the conflict in Syria will expose U.S.-European divisions. As U.S. and European paths diverge, there will be no one to play international fireman—and conflicts particularly in the Middle East will be left to rage.
2. Closed Europe
In 2016, divisions in Europe will reach a critical point as a core conflict emerges between Open Europe and Closed Europe—and a combination of inequality, refugees, terrorism, and grassroots political pressures pose an unprecedented challenge to the principles on which the European Union was founded. Europe’s open borders will face particular pressure. The risk of Britain’s exit from the E.U. is underestimated. Europe’s economics will hold together in 2016, but its broader meaning and its social fabric will not. [Read more...]