The Crisis In Apennines: Italy's Smoke and Mirrors Won't Fool Markets

[ThunderBlade + 231]

The Italian government has finally presented its much-awaited economic and fiscal forecasts. They are an exercise in smoke and mirrors of which Harry Houdini would be proud. The inflated growth figures and frankly incredible future budget adjustments are unlikely to sway investors and the European Commission. Italy is heading for a fight with the EU and, more dangerously, the financial markets. Italy will now target budget deficits of 2.4 percent, 2.1 percent and 1.8 percent of gross domestic product for the next three years. Public debt is expected to come down from 130.9 percent of GDP this year to 126.7 percent in 2021. So, all's well that ends well? Hardly.  

[franco + 96]

dark days....

[damirUSBiH + 327]

Italian populists have started slipping down a slope that will lead Italy to a Greek- or Argentine-style financial abyss?

[Petar + 76]

 

4 minutes ago, damirUSBiH said:

Italian populists have started slipping down a slope that will lead Italy to a Greek- or Argentine-style financial abyss?

Italy (GDP 1.8 trillion) is slightly different from Greece (GDP 1.9 billion). Will the EU allow Italy to fall out of the Euro? They did not allow Greece to leave the Euro. So what’s the solution?

[damirUSBiH + 327]

Austerity. And, decisions made on a realistic basis.

[pinto + 293]

The EU26 will demand that Italy take the austerity pill. The striving for a single state in Europe is bigger than the pain that Italy will have to suffer.

[jaycee + 348]

18 hours ago, pinto said:

The EU26 will demand that Italy take the austerity pill. The striving for a single state in Europe is bigger than the pain that Italy will have to suffer.

Austerity has not worked in Italy they have had it since the beginning of the decade and they are still in trouble. The problem is the taxes are too high so people avoid them, they have always avoided them to be fair but are trying harder now as the cost of living in Italy is very high and wages aren't so income after high taxes is not a lot. Lower taxes will encourage people to pay rather than avoid as its easier and spending will encourage employment which is badly needed to stop the youth being unemployed or leaving the country. If the rest of EU, or more accurately Germany, forces the Italian government to renege on its election promises there will be an even more radical government elected next time who may be more likely to leave the EU, there is no stomach for leaving just now with the majority. Migrants are also putting a big strain on Italy and the EU's feeble efforts to help them is also playing to the nationalist parties.

Edited October 6, 2018 by jaycee
Typo fix