by Patrick Fearon-Hernandez, CFA
In times of crisis, the future is a luxury. Or, at least, thinking about the future can seem like a luxury, especially if you’re reeling from the death of a loved one, the loss of a job, the devastation of a retirement portfolio, or just the boredom and isolation of a quarantine. Many people are overwhelmed with those challenges in the midst of the COVID-19 pandemic. And yet the pandemic is changing the future course of the world in ways that we’ll all need to understand and respond to eventually. Those future changes extend to politics and geopolitical relations.
In this report, we explore the recent signs suggesting the COVID-19 pandemic could potentially lead to a break-up of the European Union (EU). In Part I, we examine the history of the EU, how it works, and the political and social fissures that undermine its stability. In Part II next week, we will look at the recent policy moves by various EU countries that could lead to disintegration if carried too far. We’ll wrap up with a discussion of the possible economic consequences of a break-up and the ramifications for investors.