These are the forces at work in Italy right now:
The path to Italeave is a difficult one, requiring a referendum and a constitutional change, but trouble is brewing on a huge number of fronts simultaneously:
Any number of things could start a chain reaction making Italeave look good to a majority of Italian voters. Political parties tend to follow (from the front), 2/3 of all Italians political parties are pro exit, in a sense the negociations between Europe and the UK are going to be key here. Italy accounts for 12% of Europe's GDP and is Europe's third largest bond market (a big big deal).
More problematic, recent analysis (econometric studies) seem to indciate that the cost of exit is substantial, but not "insane". Italy's economy has gone nowhere for the past decade...and the "recovery" is close to the end of its cycle.
The path to Italeave is a difficult one, requiring a referendum and a constitutional change, but trouble is brewing on a huge number of fronts simultaneously:
- The Italian banking system is insolvent
- Another refugee crisis is brewing (this time via boats from Libya)
- Italy’s youth unemployment is a whopping 37%
- The ECB is the buyer of only resort for Italian bonds
- Italy’s debt to GDP ratio is over 130% to the consternation of Eurozone officials
- The global recovery is extremely long in the tooth
- Italy made no progress during the recovery
- The topic of Italeave is no longer taboo
Any number of things could start a chain reaction making Italeave look good to a majority of Italian voters. Political parties tend to follow (from the front), 2/3 of all Italians political parties are pro exit, in a sense the negociations between Europe and the UK are going to be key here. Italy accounts for 12% of Europe's GDP and is Europe's third largest bond market (a big big deal).
More problematic, recent analysis (econometric studies) seem to indciate that the cost of exit is substantial, but not "insane". Italy's economy has gone nowhere for the past decade...and the "recovery" is close to the end of its cycle.
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