About the author, April 29 -- Desmond Lachman is a senior fellow at the American Enterprise Institute. He was a deputy director in the International Monetary Fund's Policy Development and Review Department and the chief emerging market economic strategist at Salomon Smith Barney.

For Europe, the war in Iran brings some seriously bad news.

Disruption in traffic through the Strait of Hormuz is "significantly affecting" the eurozone's economy, European Commission President Ursula von der Leyen said this week. A prolonged crisis could trigger a government bond market crisis in three of Europe's four largest economies: France, Italy, and the United Kingdom.

The three countries were on unsustainable debt paths even before the war. According ...