Italy's banking crisis, cuts in German exports and the risk of a US recession are the "mother of all systemic threats" for the European Union (EU), says Mauldin Economics' George Friedman. He said nothing in Italy's economy can reduce its non-performing loans, the European economy cannot help, and EU regulations make an Italian government bailout almost impossible. Italy’s contagious crisis is part of a storm of instability engulfing a region that’s home to 5 billion of the planet’s 7 billion people. The Italian banking crisis would also impact Germany's banking system and exports, slashing demand and Germany's GDP and driving up unemployment. "The ECB is not going to be able to do anything about it," he said.
Italy's banking crisis, cuts in German exports and the risk of a US recession are the "mother of all systemic threats" for the European Union (EU), says Mauldin Economics' George Friedman. He said nothing in Italy's economy can reduce its non-performing loans, the European economy cannot help, and EU regulations make an Italian government bailout almost impossible. The Italian banking crisis would also impact Germany's banking system and exports, slashing demand and Germany's GDP and driving up unemployment. "The ECB is not going to be able to do anything about it," he said.