Unlike many other Eurozone economies like Spain, Ireland Portugal, Italy did not experience a real estate or stock market bubble in the 2000s; nor were its banks heavily exposed to the financial derivatives that helped spread the fallout from the U.S. subprime crisis all around the world. As such, Italy has not had cause to bail out its financial system — until now.…
Italy’s current predicament is a multi-headed hydra: a banking crisis, an economic crisis, a debt crisis, and a political crisis all rolled into one, and all coming to a head at the same time. It’s the reason why economists including Deutsche Bank AG’s Marco Stringa are calling Italy, not France or Greece, the “main risk” to euro-area stability....
Wolf Street
Italy’s Multi-Headed Hydra Predicament
Don Quijones, Spain & Mexico, editor at WOLF STREET
Italy’s Multi-Headed Hydra Predicament
Don Quijones, Spain & Mexico, editor at WOLF STREET
Italy will either force the EU to reform or it'll be its undoing. If Germany tries to impose the kind of "discipline" on Italy that is inflicted on Greece, Italy will leave the EZ and that'll trigger collapse of the euro.
ReplyDeleteHowever, citizens of the dystopia that is Euroland are living in a parallel reality in which the euro is their saviour! In which case, Euroland will live another day and the people will choose to be peasants.
What happens next? The psychology of unrequited love may trump the cold reality of peasantry. The German imperialists are counting on it...