The euro area can protect its growth from trade problems

The long-brewing trans-Atlantic train wreck now seems inevitable. A temporarily suspended trade fight between presumably closest friends and allies has entered an unpredictable crisis following America’s unilateral trade and political sanctions against Iran. Washington’s edict that “those doing business with Iran cannot do business with the U.S.” is being challenged with sound and fury — but little else — by the EU Commission, with a reportedly strong declaratory support from Russia and China. That is an ominous development, although, formally, the EU’s move to establish, and enforce, its sovereign legislative domain could be an entirely plausible act. Regrettably, nearly two years of allied discussions about Washington’s intention to renegotiate an allegedly unsatisfactory nuclear agreement with Iran have ended up in the worst ever confrontation within the trans-Atlantic community. Immediately at stake is nearly a trillion-dollar trade business between the U.S. and Europe, with millions of jobs threatened on both sides of the Atlantic. Most of that business is captured by the 19 countries of the European monetary union – particularly by Germany, France, Ireland, Italy and the Netherlands.  

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