Wednesday, June 13, 2018
'' Fixing the Euro The Time to Act Is Now '' Der Spiegel
''At 2.3 trillion euros, Italy has the largest debt load of any country in the entire European Union, and it is paired with the lowest rate of economic growth. Every third Italian under the age of 25 is unemployed. Banks in the country are struggling under the weight of a huge number of bad loans. In contrast to other eurozone countries that have experienced crisis, Italy never experienced an economic boom in the initial years of the currency union. Per-capita income has stagnated for 20 years. And yet Italy has still managed to adhere to strict EU deficit rules in recent years. From the Italian perspective, however, the benefits of doing so have been nonexistent. Against that background, the implosion of the country's political system can hardly come as a surprise.
No Simple Answer
Germany will not be able to isolate itself from the problems in Italy. If the crisis devolves further, a critical question will have to be asked: What is Germany prepared to do to keep Italy in the currency union? The explosiveness of this question is hard to overestimate. And unfortunately, it is already clear that there is no simple answer.
Italy needs more growth to be able to pay down its mountain of debt, and it also needs more social equality, especially between the rich north and the struggling south. The question as to how to achieve those goals, however..''