With a surprising and inconclusive election result and no clear route to a government almost two weeks later, Italian politics appear to have returned to what passes for normalcy there. Despite the near-term uncertainty, three things do seem clear. First, new elections are likely to take place between six months and a year from now. Second, voters are fed up with tax-heavy fiscal consolidation and structural reforms. Third, Italians have had their fill of a corrupt and gerontocratic political class, as demonstrated by the success of comedian Beppe Grillo's anti-party, anti-corruption Five Star Movement (M5S).

Despite the movement's negative portrayal in the media, Grillo's M5S could be the breath of fresh air that Italian politics badly needs if -- and it's a big if -- it can make a constructive contribution to dialog in the parliament. It is true that M5S's feud with the domestic media, crude skewering of established politicians, and potentially disastrous economic views have raised concerns from foreign policymakers and market participants. For example, Grillo personally supports a referendum on euro membership and has discussed restructuring the public debt or delaying interest payments. Officially, the Five Star Movement also hopes to roll-back the Biagi law, a liberalizing labor market reform, and renationalize the telephone network, among other economically questionable proposals.

But the movement has also been treated unfairly by international commentators. Comparisons to populist, far-right groups are just wrong. The M5S is not racist, violent, nationalist, or anti-democratic. Moreover, some of its economic proposals, especially where competition policy and reducing the state bureaucracy are concerned, are sensible. And while M5S's newly-elected parliamentarians may be inexperienced, they are also younger, more educated, and include more women than most other parties. These qualities make the movement more representative of modern Italy than many of their opponents.

But in the near-term, Italian politics will be dominated by efforts to form a government. Pier Luigi Bersani, the leader of the "Italy Common Good" coalition, gets the first crack at forming a cabinet thanks to his coalition's majority in the lower house (it failed to secure a senate majority, though). Bersani hopes to persuade the "Grillini" to support an eight point legislative plan, though Grillo has only agreed to evaluate each bill independently. The markets and the Italian public seem to understand that economic reforms are on hold for now, but both are hoping for political reforms.

Should Grillo allow political reform to move forward -- especially to the flawed electoral system -- the public will likely reward the Five Star Movement when Italy returns to the polls. (A new president must first be chosen, while electoral reform and cutting the number of parliamentarians and their salaries, as Bersani has proposed, would take several months.) A more cynical electoral strategy would be to hamstring any attempt at change, perhaps forcing Bersani to turn to Berlusconi and the center-right for a grand coalition. That strategy may allow the Grillini to capitalize on public disgust when new elections are called, but it is unclear how voters will respond if M5S adopts such an intransigent approach.

Whatever M5S does, even greater uncertainty will probably surround the next elections. Inaccurate polling, and perhaps a new voting system, will again make seat counts difficult to predict. And because markets will demand more than just political housekeeping, the stakes are almost certain to be higher. But the election could also provide an opportunity to finally move on from the dysfunctional, bipolar politics of the Second Republic, and that would be no small achievement.

Peter Ceretti is a researcher with Eurasia Group's Europe practice

By Antonio Barroso

With the survival of "Merkozy" at stake, German Chancellor Angela Merkel has inserted herself into the French presidential election on behalf of her eurozone partner, President Nicolas Sarkozy. It's not just because a Francois Hollande victory would make finding a new pithy nickname for the German-French duopoly difficult (though it would be a challenge -- "Hollmerk?" "Merkande?") Or because it has become trendy for like-minded political figures to support each other in races across national boundaries within the EU.

Merkel views the preservation of her partnership with Sarkozy as an important element in the timely resolution of the eurozone crisis, despite their rocky start, numerous disagreements, and natural rivalry. The devil that Merkel now knows well, and has spent considerable capital cultivating, is preferable to the devil she doesn't know, and can only speculate about -- a socialist who, while pro-European, has bashed the financial sector, disparaged austerity, and promised to maintain social spending. There are too many uncertainties in a Hollande presidency for Merkel to sit idly by in Berlin as Sarkozy continues to trail significantly in the polls ahead of the April 22 first-round vote.

That's why Merkel has actively stumped for Sarkozy, tying German conservatism to its French counterpart. The alliance between the German and French leaders is not just a personal bond, forged through the crucible of the eurozone crisis. Merkel believes she now has a partner in Sarkozy who shares her beliefs about the currency bloc -- and will push those interests (which also happen to be Germany's interests) in Brussels. After all of the painstaking negotiations and one-on-one meetings, she's not about to start all over again.

Hollande's political party, his campaign statements, and the fragility of the eurozone have many observers worried that a Hollande presidency would put France -- and the eurozone -- into greater danger. Some view Merkel's visible and vocal support of Sarkozy as validation of this viewpoint. But there are a few reasons why a Merkel-Hollande partnership would not be the market-rattling, eurozone-damaging outcome that many predict.

As wary as Hollande might be about austerity, or about the German model, his ability to take the EU in his ideal policy direction is limited. Why? Because the markets are on Merkel's side. Hollande only has so much room to maneuver before the markets punish France with higher borrowing costs, which would in turn threaten the integrity of the eurozone's bailout fund and its continuing efforts to prevent contagion. The pro-European Hollande does not want to preside over a new ugly chapter in the eurozone crisis.

It's also important to distinguish between what is campaign fodder and how Hollande would govern. Yes, Hollande has criticized the fiscal pact that Sarkozy, along with 24 other European leaders, agreed to in order to harmonize budgetary policies in member nations. But when Sarkozy is making his ability to lead France during an economic crisis a central campaign issue, Hollande has to find a way to distinguish himself. Hollande also can't proclaim the virtues of austerity -- and what is inherently a conservative fiscal policy -- as the leader of France's socialist party. Under the pressure of governing one of the eurozone's two major players, Hollande's policies are unlikely to differ drastically from Sarkozy's.

So is Merkel expending too much energy to stump for her favored candidate? Not necessarily. Hollande's socialist leanings, his reluctance to alienate his core voters, and his lack of a personal relationship with Merkel all suggest that decision-making between the two powers, and the eurozone as a whole, would be slower with Hollande as president. These ingredients are also the makings of a difficult personal relationship between the two leaders. And if there is one thing that markets have taught the eurozone, it is that dawdling in decision-making can be nearly as painful as making the wrong decision. The importance of Merkel's ability to pick up the phone, call Paris, and hear a familiar voice on the other end of the line should not be discounted. She doesn't have the luxury of time to cultivate another ally in the Elysee Palace.

Antonio Barroso is an analyst in Eurasia Group's Europe practice.

By Michal Meidan

Most Chinese are growing old before getting rich. The country's census results, published last week, show that of the country's 1.4 billion people, the number of those over the age of 60 ballooned by more than the population of Spain in a decade. Thanks to China's one-child policy, children under the age of 14 make up less than one-sixth of the population. This leaves the country's modestly paid working class to support two parents and four grandparents each, and taking care of one's elders can be dauntingly expensive for the average worker. The small upper class, meanwhile, is splurging on mansions. For a regime that bases its political legitimacy on economic wellbeing, a GINI coefficient nearing 0.5 (which puts China's income inequality on par with that of countries such as Sri Lanka) is a ticking time bomb.

Despite the nail-biting in Beijing about the potential consequences of inequality, the income gap is set to persist, partly because wealth is concentrated in the hands of the political elite. Many of China's new millionaires are the offspring of top officials, and other moguls have emerged from the ranks of state-owned firms. Since the beginning of the global financial crisis, the state has only tightened its grip on economic power. Private entrepreneurship is shackled, and the road to riches is closed to many. Young college graduates often earn just a fraction more than migrant workers do and have little hope of buying property, let alone the Ferraris they see in the streets of Shanghai.

So how should Beijing respond to its people's expectations and to the frustration that inevitably arises when dreams go unrealized? China's top leadership has yet to reconcile Maoist notions of equality with Deng Xiaoping's notion that "getting rich is glorious." In the meantime, Beijing will shift its emphasis from growth to development and do its best to make households richer. It is spending more heavily on welfare schemes and social safety nets and is mandating wage hikes across the country -- all of which will give workers a little more pocket money and ease the burden of supporting relatives. Officials have also begun introducing curious measures to prevent the less fortunate from realizing their increasingly less fortunate circumstances, including banning "lavishness" in advertising and restricting the size of tombstones.

This will keep resentment at bay in the near term, but social tensions are bound to rise as China muddles through its ideological crisis. To prevent them from bubbling over, Beijing will have to forge some sort of compromise: both expanding the Chinese Dream to include more people and broadening the sources of its own legitimacy.

Michal Meidan is an analyst in Eurasia Group's Asia practice.  

By Ian Bremmer and David Gordon

2010 was a difficult year for Europe, and things won't get easier in 2011. The eurozone will remain intact, but there's a serious risk that the debt crisis will become increasingly unmanageable this year. As peripheral countries struggle to implement structural reforms, the politics of austerity will put additional public pressure on supporters of the EU project in core countries like Germany and France.

In recent weeks, the EU has done little to allay investors' fears about the solvency of both sovereigns and banking systems in a number of peripheral eurozone countries. Key questions on the nature and timing of future financial bailouts remain unanswered, and important potential remedies, like increasing the European Financial Stability Facility (EFSF) and introducing new eurozone bonds, have been taken off the table, at least for now.

At the moment, the core countries, led by Germany, are committed to the euro and the European integration project, even as they avoid efforts to find systemic solutions to the crisis. In Spain and Portugal, governments are moving to fast-track fiscal consolidation and structural reform in an effort to preempt market pressures. While markets remain skeptical, the hope in Brussels, Berlin, and Paris is that this is just the beginning of a sustained rebalancing that will help stabilize the eurozone. In this view, the European economic crisis is the catalyst needed to restore policy convergence within the eurozone and to enforce peripheral Europe's compliance with the "Lisbon agenda" of labor and product market reform. Yet the idea that the EU, the ECB, and national governments can rapidly remake fiscal patterns of peripheral Europe -- let alone their labor markets and regulatory regimes -- strains credulity. That's especially true given the weak economic forecast for these countries and their inability to undertake currency devaluations.

Ireland, Greece, Portugal, and Spain have all taken impressive first steps on the fiscal side, but policy sustainability remains an open question. Politicians in each of these governments will have a hard time enforcing cuts to wages and entitlements that erode their nations' standards of living. Structural reforms like privatization and trade union regulation will threaten well-organized groups, which will mobilize in opposition. The result will not be explicit rejection of these programs, let alone an exodus from the eurozone. Peripheral Europe is more likely to take a page from developing countries in how they manage relations with the International Monetary Fund and World Bank -- with a lot of fudging and passive opting out of important parts of their plans.

The political challenges facing reform in the periphery will make it more difficult for defenders of financial bailouts within core countries, and we're likely to see new political fissures on this issue, especially in Germany. This problem will heighten the sense of broader political conflict on the continent, increase policy coordination risk (especially between Berlin and Paris), and undermine market confidence in the EU's ability to sort out the crisis.

All of this leads to the real danger: that the eurozone countries big enough to matter in global finance -- namely, Spain and Italy -- will find it increasingly difficult to borrow at rates that are financially sustainable. If that happens, the chances of a systemic crisis will grow dramatically.

On Wednesday, we'll look at no. 3 on our list of Top Risks for 2011: the geopolitics of cybersecurity.

Ian Bremmer is president of Eurasia Group. David Gordon is the firm's head of research.

By Henry Hoyle

Last week, Jim O'Neill, head of Goldman Sachs Asset Management and a longtime China expert, made the bold claim that China's allowing the yuan to appreciate is part of a "grand bargain" with the United States to win support for enlarging Beijing's clout at the International Monetary Fund (IMF). (The yuan has gained about 3 percent against the dollar since June.) O'Neill's assertion echoes others who have argued that IMF governance reform should be made contingent on concessions from China to revalue its currency. The theory may be entertaining to discuss, but there's no real evidence of a quid-pro-quo here.

The United States has long supported giving China more power at the IMF -- even in the face of the yuan's painfully slow pace of revaluation. The United States backed China's bid to expand its influence at the IMF as early as 2006, and then did so again at the G-20 summits in 2009, when China was refusing to let its currency budge.

If a deal was indeed struck, as O'Neill claims, it raises a couple of questions. First, why would China abandon its longstanding refusal to negotiate the value of its currency? And second, why would Washington believe Beijing even if the Chinese promised to let the yuan rise? China has strengthened its currency this year only when foreign pressure was nearly over the boiling point, and even reversed appreciation when international attention temporarily dwindled over the summer.

To O'Neill's credit, the concept of a "grand bargain" did factor into the original U.S. rationale for backing IMF reform that favored China. According to what a senior Treasury Department official said in 2006, granting China more voting rights at the IMF would encourage Beijing to abide by international rules and accept best economic practices. But for the past few years, Chinese policymakers seem to have operated under the assumption that once China's economy grew large enough, the West would support the expansion of China's IMF voting rights regardless of whether they made concessions. In light of the IMF's recent decision to approve China as its third most powerful member, that assumption appears to have been correct.

If, despite all this evidence, O'Neill is still right, one thing is certain: The West certainly didn't strike a very good deal. China secured its expanded voting rights in the IMF without falling into line with international norms on currency rates, export subsidies, or market access. Calling the G-20 deal a grand bargain puts too positive a spin on it. We might as well call it a giveaway.

By David Bender

Remember when Iraq was all about the oil?

Bush administration officials predicted that a post-war spike in Iraq's oil production would pay for both the conflict and ease the country's transition to democracy. Anti-war protesters countered that the war itself was little more than an oil grab. Now that the American combat mission is officially over, where is all that oil, and how will it change Iraq and the world?  

It seemed for years that violent chaos inside Iraq made a big increase in oil production entirely unrealistic; but now there are growing signs that oil project work could begin on several fields in the south over the next six months. If these projects move ahead, over the next decade, Iraq could begin to contribute enough production to significantly influence the global oil market, providing enough supply to undermine assumptions that energy demand from emerging Asia and increasing production costs will squeeze energy markets and add serious upward pressure on prices in the mid 2010s.

Iraq is now producing about 2.4 million barrels per day. The 12 contracts signed with some of the world's largest oil companies fuel hopes that Iraq can increase production nearly fivefold by 2020. That target is unrealistic, but even the likelier tripling of production levels will have important implications for the global economy and raise interesting questions about regional political dynamics. For the moment, Saudi Arabia is the only producer with enough spare capacity to single-handedly move prices. How will the Saudis respond if Iraq can produce enough oil to usurp some of that market power? How will Iran react if a surge in Iraqi production drives down oil prices, depriving Tehran of badly needed revenue? Globally, will Iraqi oil power Chinese and Indian growth? Will it kill the electric car? Iraqi oil production increases will have widespread effects-if they happen.

But Iraq will be a politically volatile and potentially unstable place to do business for the foreseeable future, and a spike in the country's oil production is anything but a sure thing. Nearly six months after parliamentary elections, U.S. combat troops leave behind a country without a government. Vote winner Iyad Allawi, incumbent Prime Minister Nouri al Maliki, an array of Shia sectarian leaders (including firebrand cleric Muqtada al Sadr), and the Kurds remain locked in a seemingly endless battle of diplomatic nerves, holding fruitless rounds of negotiations, forming and breaking alliances, and making declarations of principle with little bearing on political realities.

Read on

By Nicholas Consonery

Over the weekend, while in Busan, Korea, U.S. Treasury Secretary Tim Geithner said Beijing should resume "reform of their exchange rate mechanism." This brief comment was just a hint at the deluge of pressure China will face from the U.S. over currency policy in coming months unless the Chinese leadership allows the RMB to start appreciating against the dollar. But these days, Beijing looks less and less willing to alter course.

The RMB has been fixed against the dollar since the beginning of the financial crisis in July 2008. A month ago, Beijing looked like it was on the cusp of revaluing the RMB and allowing more upward momentum against the dollar -- mostly to assuage tension over currency policy with the United States.

But the debt crisis in Europe is weakening support in the Chinese government for changes in currency policy because the value of the RMB has been anything but stagnant against the euro in recent weeks. As concerns about European fiscal solvency have stewed in the markets, the dollar has appreciated significantly against the euro and other major currencies - and dragged the RMB along with it. Since January of this year, the RMB has actually appreciated by 20 percent against the euro-upward momentum that has accelerated significantly since May when concerns about solvency in Greece and Portugal wreaked havoc on markets. On Friday, June 4, the RMB appreciated by 1.58 percent against the euro in just that one trading day.

This rapid upward movement in the RMB against the euro presents a major concern for the Chinese economy. Why? Because the euro zone is China's single biggest export market, accounting for 19.7 percent of Chinese exports in 2009. In recent weeks, top officials at China's commerce ministry have publicly called for continued support for export-focused industries (which would include the currency peg) as the crisis in Europe plays out. Believers in this argument are now pointing to May's decline in China's purchasing manufacturer's index, which measures industrial activity, as early proof that Europe's troubles are already bleeding over into Chinese growth. Meanwhile, Chinese exporters and the local governments that support them report weaker confidence in the prospects for euro value and for the broader European economy.

But other policymakers in Beijing seem more optimistic. Among those is Zhou Xiaochuan, the central bank governor, who argued alongside Secretary Geithner that the euro crisis' impact on the Chinese economy "should not be very great." This may be wishful thinking, predicated on the belief that European officials can use enough fiscal alchemy to convince forex traders that the euro isn't on a set course to parity with the dollar this year. At the same time, Zhou might be trying to signal his continued support for pressing forward with reform to the RMB exchange rate mechanism now, despite Europe's woes.

It will fall to the top leadership in the Chinese Communist Party structure -- probably President Hu and Premier Wen themselves -- to settle this debate and make the final decision about what to do with the RMB. But if history is any guide, Beijing is steadfastly opposed to any kind of "shock therapy" for the Chinese economy. And a 20 percent appreciation of the RMB against the euro in just five months seems shocking enough to delay any more upward movement in the value of the Chinese currency for now.

I'm seeing a lot of Russians in Davos this year, but surprisingly little Russia. It's hard to say if it's a conscious decision by the Russian government, but if so, it strikes me as a pretty sound strategy. After all, Russia as a topic generally comes across as a negative in global circles--revisionist geopolitics, resource nationalism, and strongly authoritarian (albeit charismatic, in a fashion) domestic leadership. Instead, there are a healthy number of Russian executives going about their business, presenting on panels along with colleagues from other countries, and generally integrating well. It's probably their best Davos in a good long while.  

The Russians have nothing on the Japanese execs, who are here in serious force. Though absolutely none of whom are actually talking about Japan. Indeed, the only attendee I could find giving a bullish Japan story is Pepsi CEO Indra Nooyi, who apparently is making money there cans over fist. For everyone else, it's a story of a dwindling population and flat consumption, but world-class technology, strong regulatory structure, and top-notch management. Japan's model apparently is to become a bigger Singapore.

Speaking of Singapore, a sad piece of trivia I just heard: after lots of lobbying and prodding, an Armenian friend of mine (full disclosure: my mum's also Armenian) recently got Singaporean minister and mentor Lee Kuan Yew to spend three days in Armenia. But the Armenian government initially didn't want to meet with him because they didn't know who he was. Land-locked, no resources to speak of, and apparently they don't read the paper. Oy.

Ian Bremmer will be blogging from Davos this week sending reports and commentary from inside the World Economic Forum.

There's a lot of buzz about French President Sarkozy's speech last night, more than Obama's state of the union address. In part because we were sleeping, and in part because while Obama gives a better speech, Sarkozy is a more effective populist. 

It's no particular trick to go after the bankers; it's almost sport this year, but folks don't really have their heart in it.

Not so the French president. He went after the bankers, the dollar, capitalism with righteous indignation. Obama goes through the motions, but he's still all about hope and the vision thing (after all, he may need to tack back in a few months). Sarkozy wants to channel all these angry people.

To be fair, Davos folks aren't all that angry. Something like two people applauded when Sarkozy said the world had to put morality back into capitalism. There were all sorts of reasons for that (lack of) reaction -- antipathy, profound skepticism, malaise, jetlag. But it wasn't a message that was going to rile the Davos folks. Having said that, unless you're Klaus Schwab (or, nowadays, Bill Clinton), most of these speeches are for the home team.

* * *

Just overhead the Davos quote of the hour. South African President Jacob Zuma: "We must respect the culture of others. Polygamy is my culture and i treat my wives completely equal." Call it a wives' tale. Incidentally, there's a very large South African delegation accompanying the South African president, but I've only seen men. 

Ian Bremmer will be blogging from Davos this week sending reports and commentary from inside the World Economic Forum. 

By Ian Bremmer and David Gordon

Now for the red herrings, the places and problems where we think there is less risk than meets the eye.

In Iraq, elections in March will spark violence as foreign militants try to undermine the transition to Iraqi national sovereignty. A U.S. troop withdrawal beginning right after the elections will invite more violence. We could see a Sunni election boycott. But compared to what we've seen before, and what might have happened, the overall story is remarkably positive. For the markets, Iraq is suddenly an opportunity. The institutions are becoming legitimate (even with the unresolved Kurdish issue), the army is starting to work, and most importantly, political leaders from all communities are beginning to recognize the value of Iraq's tremendous natural resource base from which all can benefit if they make the compromises to maintain stability in the country. For all their basic governance problems, there's very little chance of Iraq actually becoming a failed state at this point -- a meaningful risk even a year ago. It's not a place we're ready to vacation in, but we're bullish on Iraq.

Iraq is also moving in a positive geopolitical direction. Ties with Turkey have grown particularly quickly -- not just in the Kurdish region in the north, but in Baghdad. That's one of the few positive stories for Ankara this year. Arab states in the region are still hesitant to build ties with Iraq as they wait for clarity on its next government. Maliki hasn't been a popular figure with neighboring gulf Arabs, but they recognize that Iraq's economic consolidation won't wait for another four years, and they'll start making political overtures to Baghdad if Maliki's mandate is extended. And if the Iraqi prime minister isn't returned (which is certainly plausible), we'll see a stream of head of state visits to place relations with a new leader on a more solid footing. So whatever the electoral outcome in March, we're likely to see Iraq on a faster path to integration with regional political and economic infrastructure next year. Meanwhile, Iran's role in Iraq has quietly receded. Iran's controversial presidential election and subsequent state violence did nothing to improve Tehran's influence among Iraq's Shia population, where Iraqi nationalism has been steadily growing.

The headlines for Iraq next year will undoubtedly be the timing/delays/pace of the US troop withdrawal. But the real story is going to be a moderate government, growing geopolitical influence, and the most exciting new investment opportunities the region has seen in a decade.

Read on

By Sean West

Policymakers appear puzzled by massive Wall Street payouts. Why are the banks paying such large salaries and bonuses amid such political and public sensitivity to the issue?

There are a few possible explanations. They could be enjoying one last hurrah before a new regulatory regime changes their ability to earn blockbuster profits. Or they could be showing Congress and the administration, both of which demonized the industry earlier this year, that there's nothing either can do to stop them. Or perhaps it's much simpler: Pay is how bankers measure success, so firms will go to any length to retain top talent. Even if self-regulation could go a long way to currying political favor in Washington, don't expect it from Wall Street. But massive payouts after a year of taxpayer support at a time when unemployment is over 10 percent seems like a recipe for populist backlash. So how likely is another bout of populism in response to bankers' compensation? There will be plenty of opportunities to find out in coming months.

In recent months, anger at bank pay has subsided as the administration has tried to bureaucratize the issue by appointing a "Pay Czar" and Congress has remained focused on healthcare. In March, Congress lurched into action over bonuses at AIG. Only a handful of votes away from passing draconian bonus clawback legislation, Congress earned its highest approval rating this session: 37 percent. But few members have said much on the subject since then. The White House and Treasury have followed a similar path: cognizant of a perception that the administration was becoming too interventionist, they bureaucratized the issue by appointing Kenneth Feinberg to review pay packages at banks receiving exceptional aid in order to protect taxpayer investments. Part of the calculation is to create an environment for the banks to remain competitive, which includes retaining talent that demands market-rate compensation. It was no surprise that his first set of rulings, which applied to the top 25 highest-paid employees at each of the seven largest TARP-recipient banks, got big headlines but had a relatively limited real impact.

Even if the issue is downplayed in the near term by a light-touch Pay Czar, it will be a long time before bankers are out of the woods. For starters, bankers' pay may again become a political lightening rod as Congress focuses on financial regulation reform package through early next year. This is particularly true if Obama begins to feel threatened by rising unemployment or if he senses that he is losing his base and needs to deflect anger. In that case, look out for fireworks as an election year Congress turns its attention to financial regulation in the first quarter of 2010.

It's not just up to the Treasury Department or Congress though. Banking regulators like the Federal Reserve are trying to get in front of the issue to prove their competence and preserve their current powers -- and whatever Congress passes, it will be up to the regulators to interpret and implement. Plus, a whole new round of legislating may follow from the Financial Crisis Inquiry Commission, which will unveil its report on what caused the market turmoil at the end of 2010. While Feinberg may be more of a technocrat than a czar, significant risk remains for a populist-driven response to bankers' pay going forward.

Sean West is a U.S. policy analyst at Eurasia Group.

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