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Economy

Eurozone politics poses biggest risk in 2015

NEW YORK -- The politics of Europe poses the greatest risk to the global community in 2015, according to an annual ranking released Monday by Eurasia Group, a leading U.S. political risk consultancy.

     Anti-European Union parties are expected to gain ground in Greece and Spain, which are headed to the polls this year, as well as in France, the U.K. and Germany, constraining these governments' options.

     Eurasia Group ranked Russia as the second-largest risk factor. Its rift with the U.S. is expected to widen over the Ukraine crisis. It could also reorient itself toward China, and upset the international sanction regime against nuclear development in Iran.

     China's slowdown, which ranked third, may have a particularly large effect on Brazil and other commodity exporters that have increased their dependence on the Asian giant.

     The report also warned that the U.S. is weaponizing finance through an increased use of sanctions in the political arena, which could eventually drive the international community away from the dollar. And it pointed to growing government influence on strategic sectors, such as technology, telecommunications and finance. Concerns were also raised that companies seen as close to the U.S. government could face challenges in conducting business with foreign clients.

     Relations between Taiwan and mainland China came in ninth. U.S.-China relations could be affected as well if Taipei and Beijing take back agreed upon trade and investment pacts.

     The report touched on several red herrings, including nationalism in Asia. The consultancy argued that key regional players such as Japan, China, India and Indonesia do not wish to butt heads with other countries, and would be able to make level-headed decisions should unexpected clashes arise.

     Market watchers keep a close eye on rankings by Eurasia Group, which is headed by U.S. political scientist Ian Bremmer. In 2014, the consultancy predicted the plunge in crude oil prices and Russia's hardball approach to Ukraine.

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