This week starts with politics (most in Europe), which seems to be playing an undue role in the pure world of economics these days.

The French presidential primary of the center-right has produced a victory for the establishment with the election of former prime minister François Fillon. This is not per se a major shock as it was generally expected after the first round that had already showed Fillon had a comfortable advantage over another establishment figure and also former prime minister Allain Juppe.

Market attention starts now to focus on April and May 2017 and the French presidential election, which is an important event.

At present, those not so reliable indicators that are opinion polls are suggesting that the far-right anti-establishment candidate Marine Le Pen of the Front National will win the first round of the presidential election in April 2017, but that she will not win the Presidency against Fillon in the second round due in May.

If that is the case, France would have a conservative center-right President who, among other things, is an admirer of the late British Stateswoman Margaret Thatcher and who claims “France first”.

In the United States, Trump has declared that millions of people voted illegally. No evidence in support of this has been offered, but, yes, it is hard to present all of the details in 140 characters.

Recounts now look likely in a number of States, but this is not expected to impact financial markets. A Hillary campaign lawyer, Marc Elias, said that Clinton would join in the vote-recall effort by Green Party Candidate Jill Stein (Ref. http://www.foxnews.com/politics/2016/11/27/clinton-joining-vote-recount-appears-to-test-fragile-truce-with-trump.html).

The focus for investors remains on Trump’s cabinet nominations as these nominations are likely to indicate the policy structure of the incoming administration. We still await tweets about who will be Secretary of State and who will be Treasury Secretary.

OPEC is scheduled to meet on Wednesday and the Saudis are now saying that there will not necessarily be a production cut and that maybe production cuts are not necessary at all.

The staggering surprise of OPEC failing to agree anything is unlikely to have a great deal of impact on financial markets. A healthy dose of cynicism is called for every OPEC gettogether.

In the EU, the Italian statistics office released the latest business and consumer confidence data that came in, once again, weak with only consumer confidence a little bit better, which permits supposing that Italian economic growth in Q4 will have it hard to match the 0.3 percent growth rate of Q3 (Ref. http://www.mail2world.com/Attach/D/5/5/D553258C-6353-41BA-A38E-A6B27041F688_hans_etienne_parisis_mail2world_com/image.png).

Of course, these numbers do not reflect the political risk ahead of the forthcoming referendum on constitutional reform on December 4.

Nevertheless, Italy’s problems are much bigger than many investors think, and therefore it might be good, especially for those investors who look at euro-linked/based investments, that the Financial Times (FT) published on Sunday an alarming article titled “Fears mount of multiple bank failures if Renzi loses referendum.” (Ref. https://www.ft.com/content/e588ea6a-b49f-11e6-961e-a1acd97f622d)

The FT writes that if, and that’s of course a big if, the Italian prime minister Matteo Renzi loses next weekend the constitutional referendum and that situation ignites very strong market turbulences that are so strong that investors refrain from recapitalizing the troubled Italian banks, we could see up to 8 troubled Italian banks failing, which is of course serious stuff.

Of course, we aren’t there yet.

Anyway, financiers and policymakers are watching the whole situation closely because a failure of about 8 Italian banks would cause, without any doubt, panic in the Euro area and its banking system and far beyond.

Finally, and also noteworthy, the UK daily ‘The Telegraph’ writes that Bank of England (BOE) Governor Mark Carney is to warn Brussels that the European financial system faces a shock unless policymakers give institutions more time to adapt to trading arrangements after Brexit ( http://www.telegraph.co.uk/business/2016/11/27/mark-carney-plans-keep-britain-eu-single-market-2021/)

In his capacity as vice-chairman of the European Systemic Risk Board (ESRB), Mr. Carney is expected to stress to the European Commission and the heads of top EU financial services bodies next month that a transition deal is in the interest of the EU as much as it is for the UK. We’ll keep an eye on it and see how the hardliners will react to that.

Investors could do well keeping in mind that Euro area linked risks are definitively on the rise once again and it doesn’t look that’s going to change quickly.

Etienne "Hans" Parisis is a bank economist who has advised global billionaires and governments on the financial markets and international investments.