There have already been some recent successes at the ballot box for such candidates in regional and local elections in both countries. The Italian and Spanish economies are far larger than Greece’s and any politically fueled debt crisis involving either country would be much less manageable than the Greece situation.
Then there is David Cameron’s renegotiation of Britain’s EU membership running alongside this. The process has begun in earnest remarkably quickly after the UK election. President of the European Commission Jean-Claude Juncker was reportedly in the UK meeting with Cameron over the weekend and a first round of talks with Germany’s leader Angela Merkel has just taken place.
Any signs that the renegotiation is breaking down with no real progress would significantly raise the chance of a British vote to exit, and it is hard to see how European as well as UK equities would not be hit by the prospect of a much closer referendum vote than is currently priced into markets.
By July, and possibly sooner, investors who bet heavily on European equities during the past five months will have a much clearer idea of how safe their money is.
