The Italian referendum is the current hot concern for investors, who are worrying and waiting to see if voters will reject government attempts to reform the country's political system.
Prime Minister Matteo Renzi has staked his reputation and job on the outcome, arguing a change in the legislature will usher in a nimbler, more productive Italy.
However some see the predicted rejection of Renzi's wishes as a potential opportunity for anti-European populist to gain momentum.
Jan Randolph, Director of Sovereign Risk at IHS Markit said in an email Friday that worries over a potential European break-up can be measured by Europe's "fear gauge": The difference in yield between Italian and German debt.
"The markets are certainly focusing on this 'spread' – what we used to call in the old British banking days the 'country risk spread' as viewed by the financial markets," Randolph said.
In recent weeks, the yield spread between Italian and German 10-year government bonds has risen by more than 60 points in 60 days.
Last week the spread hit a two-and-a-half year high of 188 basis points, however Reuters reported Friday that investors may be short covering as the gap between Italian and German bond yields has narrowed to 167 basis points.
Jan Randolph said any blow-out of Italian yields may well be prevented by the poker hand being played by European Central Bank President Mario Draghi's massive bond-buying program, which many analysts expect to be extended next year.
"The ECB has deliberately kept its QE (quantitative easing) program both flexible and open-ended in the event that certain political risks crystalize this year," he said.
However Randolph warned that a strong No vote from the Italian voters and a shift towards the populist 5-Star party may spike Italian debts to levels even beyond ECB control.
"This would be really disturbing for EU leaders as it could open the prospects of a 5-Star stab at government with all the upheaval that would entail for the Euro and still higher Italian bond yield – something even the ECB may find difficult to manage," he said.