11. Why Emerging Markets Do Not Hold a Monopoly on Country Risk in the Twenty-First Century: An Analysis of Monetary and Systemic Risks in the OECD and in the Euro-Zone

This chapter explores three main risks. First, it addresses the threat of secular stagnation in developed countries where slower growth reinforces the consequences of rising debt leverage. It discusses to what extent this threat affects country risk assessment. Second, it presents an analysis of monetary policy-related systemic risk in the Organization for Economic Co-operation and Development (OECD) and in the Euro-zone region through the challenge of OECD’s central banks to maintain low-interest rate and boosting long-term growth. Third, it discusses the specific case of the Eurozone and the macroeconomic constraints of the Maastricht Treaty. The chapter also includes two case studies—the root causes of the crisis in Greece, Ireland, Portugal, and Spain (so-called PIGS), and common risk factors arising out of the Global Financial Crisis.