The Irish Mail on Sunday - - NEWS -

THE fall­out from Pres­i­dent Trump’s trade war with Turkey which has sent the coun­try’s cur­rency plum­met­ing in value may lead to re­ces­sion in Europe, ex­perts fear. The warn­ing comes af­ter the lira fell an as­tound­ing 20% on Fri­day – mean­ing the cur­rency has tum­bled by al­most half over the past year, slash­ing the cost of a beer from €2.90 in 2017 to €1.80 this year. This week’s freefall fol­lows the US dou­bling im­port tar­iffs on the coun­try’s steel and alu­minium. Turkey’s Pres­i­dent Er­do­gan said the coun­try is now in a state of ‘eco­nomic war’ with Amer­ica.

Banks across Europe which have loaned bil­lions of eu­ros to Turkey may be in trou­ble, as busi­nesses there strug­gle to make re­pay­ments. In the worst case sce­nario of the col­lapse of a Eu­ro­pean bank there could be ‘con­ta­gion’ rais­ing the spectre of the tur­moil of 2008.

Neil Wil­son, of Mar­, said fi­nan­cial mar­kets face their most se­ri­ous threat at least since the debt cri­sis which en­gulfed states in the eu­ro­zone four years ago. Say­ing there was con­ta­gion from Turkey in emerg­ing mar­kets, he added, ‘It could spark a re­ces­sion in de­vel­oped na­tions too.’

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