Strategist: The alliance at the core of the global economic order has deteriorated

(Bloomberg) — Divergence between the U.S. and Europe goes far deeper than currency values or interest rates, according to Eurasia Group.

“We’ve never seen the relationship between the United States and Europe — the most important and foundational alliance for the world’s economic system — so weak since the end of World War Two,” said President Ian Bremmer during an interview on BloombergTV. “This is not a relationship that we’ve seen, and it’s so critical to maintain stability not only for global markets but also for the hot spots that we’re looking at.”

As tensions and turmoil in the Middle East mount, the influence of the trans-Atlantic alliance — the driving force behind major international institutions and agreements like the North Atlantic Treaty Organization, the Bretton Woods accord, the United Nations, the World Trade Organization, the International Monetary Fund, and the World Bank — continues to wane.

In a report detailing the top risks for the year ahead, Bremmer and Chairman Cliff Kupchan discussed why this “hollow alliance” be a huge theme for 2016.

This multi-continent marriage is by no means over, but the parties are clearly sleeping in different beds. The alliance has drifted apart for three key reasons, according to Bremmer and Kupchan: 

1. The rise of emerging markets — particularly China — in the global economic and geopolitical orders; 

2. The U.S. tendency to go it alone in international affairs; and

3. Europe’s economic and political quagmires.

The deterioration of this relationship is evident by its lack of inclusion in the U.S. political agenda, according to Eurasia Group.