Editorial
Eurozone debt crisis
Italy next on the agenda?
A lot has been said about Greece, its debts, the bailout packages to help salvage its economy and the eventual possibility that it may exit the Eurozone. However, Greece only makes up about 2% of the Gross Domestic Product of the European Union. The real potential dangers may come from Italy, which is one of the seven largest economies in the world and the third largest in the Eurozone.
Italy's debts surpass those of Greece, Spain, Portugal and Ireland put together. It accounts for 17 percent of the Eurozone's Gross Domestic Product, thus an economic crisis in Italy represents an extremely volatile situation for the other Eurozone countries.
Italian Premier Berlusconi has promised to resign after Parliament passes economic reforms. Berlusconi's 17 years in public office, often overshadowed by scandals and alleged corruption have undoubtedly contributed to poor governance and to the Italian debt crisis.
The stronger European countries such as France and Germany have already bailed out Greece, Ireland and Portugal, with Greece receiving an additional 100 billion Euros as debt relief. The biggest challenge France and Germany face with Italy today is that its debt of 1.9 trillion Euros is far too large for Europe to bail out. In addition, growth in Italy is stalled, 14% of the population now live in poverty, and one third of the youth are unemployed.
What is clear here is that Italy is in dire need of a stable and solid government which implements austerity measures. A dependable and strong leadership which has been lacking for many years is of optimum importance now. Failure to do so could have grave consequences for the stability and sustainability of the European markets and cause a global recession.
We remain hopeful that such events can be avoided.
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