TRUMP THREAT OF EU RECESSION
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 Markets.com, 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.’