Italian imbroglio may trigger new global crisis

Washington

IN choosing this moment to heighten trade tensions with Europe, US President Donald Trump is ignoring major economic and political upheaval in Rome. Trouble in Italy, the euro area's third-largest economy, has the potential to trigger a global economic disaster on the scale of the 2008 financial crisis.

Before enforcing restrictive trade measures that might blacken Europe's economic outlook, the Trump administration should remind itself of Italy's systemic importance to the world economy. Italy's economy is 10 times larger than that of Greece, whose debt crisis shook the euro area's foundations. The single currency is unlikely to survive in its present form if Italy was forced to exit that monetary arrangement.