"New fault line in monetary union"

When the new governing coalition in Italy presented its new economic programme at the end of May, the financial markets experienced a harsh reality shock. Bond markets punished Italian government bonds with the sharpest rise in yields and risk premiums since the 2010 financial crisis. Although markets have since calmed down again, the negative momentum in the eurozone remains high in 2018. The ECB's monetary bailouts expire at the end of the year and the Italian problem remains a threat. In addition, new forces have formed that - hardly noticed by the general public so far - question the previous statics of the Eurozone.

A new split in the EU

What is meant is a new fault line in the monetary union, which became clearly visible for the first time at the EU summit in Brussels. "Despite detailed roadmaps and intensive preparatory work - including the Franco-German Meseberg Declaration - the EU was able to make little progress there on its way to a sprawling transfer union," explains Dr. Heinz-Werner Rapp, founder and head of the FERI Cognitive Finance Institute in Bad Homburg. The active intervention of a critical group, now known as the "Hanseatic League", is responsible for this. Behind it, under the leadership of the Netherlands, is an association of currently twelve northern EU member states that openly oppose the escalating costs and risks of a further deepening of the EU. It is striking that this process has hardly been commented on by "high politics" so far.

Euro risks are increasing

"However, historical experience shows that it is usually the smaller but economically strong countries that are the first to draw the consequences as soon as a monetary union no longer functions properly," Rapp said. The further behavior of this group, which represents more than 40 percent of the voting shares in the EU, must therefore be watched very closely in the future, he said. "Should countries such as Austria, Finland, Ireland or the Netherlands - for good reason - persistently block the centralist plans of the EU Commission, the fragile statics of the monetary union would come under further pressure," warns Rapp, referring to a detailed analysis by the FERI Cognitive Finance Institute. Contrary to the widespread carelessness, an increase in risks for the euro is therefore to be expected in 2018.

The detailed study of the FERI Institute, which proves a structurally aggravated risk situation in the euro zone, is available in German for download here .