The Eurozone: Breaking up is hard to do

THE long running soap opera centring around whether the eurozone will break up is now into its eighth year! In 2015 all the focus was on the latest Greek tantrum and last year the big fear was that the populist/nationalist Brexit vote and Trump victory would lead to a surge in support for populist parties across Europe and drive a eurozone breakup. There was no sign of this in Spanish and Austrian elections, but this will be put to the test again with elections this year in the Netherlands, France, Germany and maybe in Italy. The fear is that a eurozone breakup will plunge the world's third biggest economic region into recession and financial chaos, which would adversely affect the global economy. Such a fear may be exaggerated - the UK hardly imploded after Brexit - but that's the worry.

The big picture

There are several reasons why Europe differs from the UK and US. Firstly, it doesn't have the issues with inequality that drove the anti-establishment backlash in the US and UK. The Gini coefficient which measures income inequality is below average.