If investors can correctly pinpoint the real reason behind these low sovereign debt yields, they will also be able to find a great parking place for their investment capital to weather the upcoming storm.
The political risks of the EU are currently understated by financial integration measures. 2014 is likely the year of EU political fragmentation and will be evidenced in the European Parliament elections to some degree, and will increase as the debate over the future of EU policy broadens.
What has evolved over the last 20 or so years is a natural divergence between the fundamentally weaker and stronger economies, particularly since the onset of the global financial crisis five years ago.
Europe is a different case from other countries, since they have nothing close to monetary sovereignty, and they are completely reliant on an international, stateless European Central Bank, that is, for now, mostly controlled by Germany.
It's not just the European economy that is in crisis. The very idea of Europe has lost its shine. "Europe" once meant a more egalitarian and more tolerant model than the free market orthodoxy reigning in the United States.