A Quote by George Friedman
Italy is the fourth-largest economy in Europe and the eighth-largest economy in the world, and its banking system is collapsing. And Germany is desperate. It must maintain its standard of living. It can only do that with exports and Deutsche Bank is very exposed to Italian debt. But so is the rest of Europe.
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Italy spills over to everything. Italy is a huge banking system. It has been the major banking system in Eastern Europe. It's worked with Austria's banking system. There's all sorts of interplays there. So it's not the PIIGS one should worry about. Germany hasn't even begun falling yet. And when Germany falls, and it will, that's when the panic begins to set in.
The savings rate in Italy is high, but the markets do not trust Italy even though it's the third largest economy in the European Union and the eighth in the world.
The largest weight is now on Germany's shoulders. Chancellor Merkel must continue to convince people of the EU's importance; she must spearhead the effort to redefine the EU. In order to do this, Germany must become a muscular democracy. It needs to shoulder far more responsibility for the physical security of Europe, especially Eastern Europe and the Mediterranean. So far, unfortunately, Germany has taken the lead in disrespecting Europe's borders by opening its doors to more than a million refugees and migrants.
Europe is good at many things, which is why we are the largest exporter in the world. Thirty million people in Europe are employed in making our exports of goods and services. Just under 900 thousand of them are in Sweden.
Mexico now has the 13th largest economy in the world. The Organization for Economic Cooperation and Development predicts it will have a larger economy than Germany by 2042.
Europe is very critical to the United States in the sense not only do we have a fourth of our exports there, but more importantly, a significant proportion of the foreign affiliate profits in fact, half of U.S. corporations, are in Europe.
We should not chip away at the protections that have built the largest economy and the largest middle class in the world.
At the moment we are hard-wired into the European markets - 50% of our exports go to Europe - and that has not been good for the UK. So I'm not saying "make Britain entirely dependent on China". I'm saying "let's diversify a bit". When I became chancellor, China was our ninth largest trading partner. This is the world's second biggest economy. China was doing more business with Belgium than it was with Britain.
If you look at 2009, why did the recovery happen? Recovery happened because somebody in the world's largest economy opened the tap: the U.S., followed by Europe and now Japan.
Germany is the biggest economy of Europe and we need Germany on board for the economic reforms of Europe, including, of course, the deepening of the internal market, resisting protectionism, and supporting further economic policy coordination.
Southern Europe has not done enough to enhance its competitiveness, while northern Europe has not done enough to boost demand. Debt burdens remain crushing, and Europe's economy remains unable to grow.
Germany will always do the minimum to preserve the euro. Doing the minimum, though, will perpetuate the situation where the debtor countries in Europe have to pay tremendous premiums to refinance their debt. The result will be a Europe in which Germany is seen as an imperial power that will not be loved and admired by the rest of Europe - but hated and resisted, because it will perceived as an oppressive power.
Well, the U.S., of course, is the world's largest economy. It's about a quarter of the world's output. It's also home to many of the largest financial institutions and financial markets.
Now, as the world's largest economy and as the world's second largest emitter, America bears our responsibility to address climate change, and we intend to meet that responsibility.
Of course, the UK is a significant economy that makes up a quarter of American exports to the EU, more than 50 percent of our exports in certain sectors and over 25 percent of the government procurement opportunities we have in Europe. Brexit reduces the size of the TTIP deal for the United States, and there will need to be an adjustment of expectations accordingly, but Brexit underscores the value of reaching an agreement at this critical moment in the evolution of Europe.
Britain, Europe's second largest economy, a member of the G-7 and the UN Security Council, wants to leave the EU. That weakens us and it weakens Britain.
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