Alcoa Inc's workers protest against their dismissals from employment in front of the Ministry of Employment building in Rome. Reuters/Tony Gentile The latest Greece deal notwithstanding, George Friedman says Europe’s southern tier is in a “massive depression” that isn’t getting better.

Speaking at the Mauldin Economics Strategic Investment Conference in Dallas, Friedman said entire economies are failing. It’s not just Greece. Unemployment is over 20% in Spain, Portugal, and Italy while youth unemployment is even higher.

Italy is especially problematic. The world’s eighth largest economy has a completely unsustainable banking system. European authorities have tried to hold it together by imposing social costs on unrelated parties. But those unrelated parties don’t like it, and they are ready to turn the tables.

A bank crisis in Italy would be bad enough, but right now, Europe can’t count on Germany to come to the rescue. The Germans have their own problems. Their export-dependent economy relies on customers who will buy what Germany makes. Maintaining exports when your customers are either broke or shopping elsewhere is hard on business.

Just to make it even more interesting, a resurgent Russia is forcing Europe, and particularly Germany, to get back into the defense business. And the US is no longer willing to pay the full cost of the NATO alliance.

How will the crisis end? Friedman doesn’t know, but he’s sure it won’t be good.

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