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Economist Michael Ivanovitch told US business network CNBC that the Italian budget, which has drawn criticism from the EU and increased tensions in the bloc, is “entirely appropriate” and the US should put pressure on Berlin to ensure a repeat of the Greek economic crash does not happen again with Italy. He argued the EU’s rejection of Italy’s budget can be put largely down to government officials hoping to use the crisis to defeat their opponents in next year’s European Parliament elections. Writing for the business news network’s website, he said: “Washington should stop Germany from repeating a Greek tragedy in Italy. “Unless that is done there is no sense for the US to foot three quarters of a bill for the largest military and political alliance the world has ever known.

“The US economic and financial authorities know everything they need to know about the Italian budget for 2019 — an entirely appropriate counter-cyclical fiscal policy well within the euro area budget rules. “But Germany, with France in tow, seems hellbent on using its own reading of that budget as a pretext for destroying the Italian economy and its democratically elected government. “That is a pathetic example of how far the sinking governing elites are ready to go to fight their opponents in the elections to the European Parliament scheduled for May 2019.” The EU has rejected Italy’s budget over Rome’s plans to borrow and spend more despite already having one of the highest levels of debt in the world which currently stands at more than 130 percent of GDP.

Michael Ivanovitch has slammed Germany and France's handling of the Italian budget crisis

The Italian government has said it will defy a Brussels ultimatum as it refuses to back down in the feud. The EU has said it will sanction Italy by slapping it with a £3billion fine unless it falls into line with their fiscal rules. However, in a letter due to be submitted to the EU tomorrow, politicians making up Italy’s ruling coalition have said they will not bow to EU pressure and adjust their budget deficit targets. Mr Ivanovitch added the US should pressure Germany to come to an agreement with Italy, saying Rome is an important security partner and threats to throw Greece out of the eurozone before they were bailed out should not be repeated to the Italians.

Economist Michael Ivanovitch has warned France and Germany against repeating the Greek tragedy with

He said: “In July 2015, the US helped France keep Greece in the euro area, saving that long-suffering country from economic and political destruction. “Working together, Washington and Paris squashed the German plan for throwing Greece out of the monetary union. “One can now see how important it was to keep Greece functioning. The Greeks are hosting huge assets of a US-led alliance controlling the Eastern Mediterranean and battlefield operations in the Middle East. “Italy is equally central to US national security. The country has many allied military installations, with command headquarters in Naples and a new hub in Sicily covering the Mediterranean, North Africa, Middle East and most of the Balkans. “None of that is compromised by Italy's right-of-centre government. On the contrary, Italy remains an unquestionably loyal alliance member.”

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