Italy 's banking crisis , cuts in German exports and the risk of a US recession are the " mother of all systemic problems " for the European Union ( EU ) , says Mauldin Economics ' George Smith . He said nothing in Italy 's economy can reduce its non - performing loans , the European economy can not help , and EU regulations make an Italian government bailout almost impossible . The Italian banking crisis would also affect Germany 's banking system and exports , slashing exports and Germany 's GDP and driving up unemployment . 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. Finally , a US recession would affect Germany , which has shifted its exports to non - EU countries , particularly the US , as well as other European countries .
Italy 's banking crisis , cuts in German exports and the risk of a US recession are the " mother of all systemic problems " for the European Union ( EU ) , says Mauldin Economics ' George Smith . He said nothing in Italy 's economy can reduce its non - performing loans , the European economy can not help , and EU regulations make an Italian government bailout almost impossible . The Italian banking crisis would also affect Germany 's banking system and exports , slashing exports and Germany 's GDP and driving up unemployment . Finally , a US recession would affect Germany , which has shifted its exports to non - EU countries , particularly the US , as well as other European countries .