Europe enters the new year grappling with uneven fiscal realities and rising geopolitical strain ... and geopolitics are increasingly intertwined across the continent.UK borrowing falls despite headwinds.
In a worst-case scenario—the "Stagflation Depression" tail-risk—a geopolitical incident in the Taiwan Strait or the Strait of Hormuz could provide the exogenous shock that turns a moderate downturn into a systemic crisis.
It also has the supplementary geopolitical effect of denying crude to Washington’s main adversary, given that around 80% of Venezuela’s oil exports are bought by China.