Italy on the brink of economic collapse & with it goes the EU (Video)
The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris discuss Italy’s failing, post covid lockdown economy which has revealed that the country has a staggering €39 billion of repayments due in September and €42billion of repayments in November.
Italy now has to either enter ESM austerity, again, or the ECB has to begin a massive money printing cycle to bail out the giant Italian economy.
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Italy’s finance minister Roberto Gualtieri has poured cold water on initial optimism after the agreement of the EU’s coronavirus rescue package last week – warning the country will be saddled with enormous debt repayments over the course of the next few months..
Meanwhile, Jens Weidmann, president of Bundesbank, Germany’s central bank, has voiced concern at the idea of countries having joint debts to cope with the crisis – describing the situation as “alarming”. Mr Gualtieri met with members of the ruling coalition, comprising the centre-left Democratic party and the anti-establishment Five Star Movement (5SM), behind closed doors to offer a grim assessment of the £677billion (€750billion) deal, and associated £1trillion budget.
Specifically, he warned the treasury will find if difficult to run budget deficit totally 12 percent of GDP while at the same time redeeming a large number of old debts which are coming due between now and the end of the year.
Mr Gualtieri also told ministers the country needed to make a formal request to the European Union’s European Stability Mechanism (ESM) for £33billion (€36billion) in immediate pandemic loans, Italian newspaper Il Sole reported.
Italy’s Prime Minister Giuseppe Conte had initially been hailed as a hero domestically in the wake of the summit – but reality is starting to bite.
Data from Italy’s treasures revealed the country £35.7billion (€39billion) of repayments are due in September, a similar amount the following month, and £38.5billion (€42billion) in November.
As a result, Italy’s financing costs could be pushed up to almost half a trillion euros this year.
Lorenzo Codogno, ex-chief economist at the Italian treasury, said: “There is a massive borrowing need.
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of The Duran.