The Risk of the Euro Zone Breaking Up Is Real, but It Is More Political Than Financial.

Italy is obviously on the front line in terms of political risk.

During the debt crisis in the eurozone in early 2010, there was a fear that the euro would break up. Suddenly, after the subprime crisis, countries with external surpluses (Germany, and the Netherlands) refused to continue lending to countries with external deficits (Spain, Italy, Portugal, and Greece).

This led to a considerable rise in interest rates i…