Italy’s Debt Burden Will Breach 1920 Record
Debt will grow to almost 160% of GDP this year
Bloomberg 15 April 2021
Och Italien har ingen egen valuta och således ingen egen sedelpress.
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But the question remains: how will member states pay back the debt in the end?
The answer is simple, said Guntram Wolff, head of the Bruegel economic research institute in Brussels.
"The decisive factor with high debt is always the growth rate," he said. "If you achieve higher growth, the debt problem actually takes care of itself.
Meanwhile, debts continue to balloon across the bloc.
Greece is heading for a debt ratio of 200%, while in Italy it's close to 180%.
If this had happened before the COVID crisis, alarm bells would be ringing. But this time, experts like Wolff and Ferber aren't too worried about Greece, the perpetual headache of the last crisis. Both believe the country has sufficiently restructured its economy over the last decade.
"My biggest concern, to put it bluntly, is Italy."
He said that if interest rates rise or there is a wave of bankruptcies, the Italian state and banks could quickly find themselves in trouble again.
Mario Draghi, Italy's new prime minister and former head of the European Central Bank, is backing a clear growth policy.
That could work, said Wolff. "If Italy has just a little more growth, then a financial crisis is very, very unlikely,"
And if not? That is very unlikely, said the experts.
Deutsche Welle 17 April 2021
https://www.dw.com/en/whos-paying-for-europes-covid-related-debts/a-57233153
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