EU News: Italy named as favorite to leave EU following explosive new report | Politics | New

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EconPol Europe research paper suggests Italy and the most vulnerable members of the EU’s single currency bloc are in ‘near stagnation’ following lockdown measures to curb the spread of the virus . Its authors, Luigi Bonatti and Andrea Fracasso, said struggling economies could become “serious contagion risks” if left to fail by policymakers. They say that German Chancellor Angela Merkel’s decision to pave the way for a common European debt is only a short-term solution to the financial problems facing Rome.

Their report states: “The risk that Italy’s fragile financial, economic and political situation, exacerbated by the current crisis, could destabilize the euro area as a whole in the absence of significant external aid has likely been overwhelming. ‘one of the main determinants of the policy change of the German government.

“We contend that while this change is enough to prevent Italy from plunging into a major financial and political crisis in the short term, thus gaining time, it is far from sure that it will be enough to lead Italy towards sustainable and satisfactory growth. way, in order to avoid that in the longer term it needs additional financial support from EU institutions and Member States.

“As a result, the latter may again be faced with the dilemma of providing financial assistance to the most vulnerable countries in the euro area, thereby making permanent what was supposed to be temporary, or exposing the euro area to possible implosion. “

Italy, the EU’s third-largest economy, is set to receive up to € 209 billion from the bloc’s coronavirus recovery fund.

The program was crafted at an acrimonious summit in July and will see the bloc borrow € 750 billion from international markets to distribute in the form of grants and low-cost loans to regions and industries ravaged by the pandemic.

But despite the help, bookmakers are still backing Rome to be the next capital to leave the EU.

Without referring to the report, Joe Short, political betting analyst at Gambling.com, said: “In Italy, discontent with the bloc has grown since the 2018 general election, in which the populist League and Five Star Movement were brought to power. .

“The parties have made anti-immigration, Euroscepticism and populism their main policies, but they have also been balanced by the left stance of the Democratic Party.

“And before the coronavirus pandemic seriously took hold of the nation, Italy seemed on the way to a referendum on leaving the EU.”

According to the Oddschecker website, Italy is a 3/1 favorite to be the next country to leave the EU.

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