| 来源类型 | Report
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| 规范类型 | 报告
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| Italian risks to the eurozone |
| Desmond Lachman; Ryan Nabil
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| 发表日期 | 2018-02-20
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| 出版年 | 2018
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| 语种 | 英语
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| 摘要 | Key Points
Italy’s forthcoming parliamentary elections must produce a government committed to solving the country’s crippling economic problems via far-reaching reforms.
Judging by Italy’s poor economic performance since 2000, it would seem that adopting the euro as its currency in 1999 was a big mistake. However, leaving the euro at this stage would not seem to be a viable alternative for the country.
Most economists would agree that Italy needs faster economic growth if it is to resolve its public debt and banking-sector problems in an orderly manner.
With an appreciable risk that Italy could crash out of the euro, hopefully the elections produce a united government committed to serious economic reform.
Read the full PDF.
Executive Summary
Italy, the eurozone’s third-largest economy, is due to hold parliamentary elections on March 4, 2018. The importance of those elections for both Italy and the eurozone cannot be overstated. Italy is simply too large an economy to fail for the euro to survive. However, it is also too large an economy for the eurozone to save.
At the heart of Italy’s economic vulnerability is its seeming inability to generate meaningful economic growth or to improve its labor market productivity in a euro straitjacket. Over the past decade, the lack of economic growth has contributed to a continued rise in the Italian public debt-to-GDP ratio to a dangerous level. It also has prevented the country from materially improving the state of its shaky banking system. Being locked in the euro, Italy’s lackluster productivity performance has resulted in a large loss in international competitiveness.
The forthcoming elections seem unlikely to produce a coherent and reform-minded Italian government that might decisively address the country’s economic vulnerabilities. To date, markets have turned a blind eye to these vulnerabilities in a favorable global economic environment of ample global liquidity. However, it remains to be seen how forgiving markets will be when the external environment takes a turn for the worse and when the European Central Bank discontinues its large government bond-buying program.
Introduction
Italy, the eurozone’s third-largest economy, is due to hold parliamentary elections on March 4, 2018.1 The importance of those elections for both Italy and the eurozone cannot be overstated. Italy is simply too large an economy to fail and for the euro to survive. Yet it is also too large an economy for the eurozone to save. For this reason, one has to hope that the forthcoming elections produce an Italian government much more committed to implementing far-reaching economic reforms than previous Italian governments have been.
At the heart of Italy’s economic vulnerability is its seeming inability to generate meaningful economic growth. This lack of economic growth has contributed to a continued rise in the Italian public debt-to- GDP ratio to a dangerous level, and it has prevented the government from materially improving the state of its shaky banking system. While markets might have turned a blind eye to these vulnerabilities in a favorable global economic environment of ample central bank liquidity, it remains to be seen how forgiving markets will be when the external environment takes a turn for the worse and the European Central Bank (ECB) discontinues its large government-bond-buying program.
Read the full report.
Notes |
| 主题 | Economics
|
| 标签 | Elections
; Eurozone
; Italy
|
| URL | https://www.aei.org/research-products/report/italian-risks-to-the-eurozone/
|
| 来源智库 | American Enterprise Institute (United States)
|
| 资源类型 | 智库出版物
|
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/206517
|
推荐引用方式
GB/T 7714 |
Desmond Lachman,Ryan Nabil. Italian risks to the eurozone. 2018.
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文件名：
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Italian-Risks-to-the-Eurozone.pdf
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格式：
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Adobe PDF
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