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IPFS News Link • European Union

Italy's Miserable Eurozone Experience: 20 More Years of Woe Coming

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"The IMF has warned that Italy faces two decades of stagnant economic growth.

Its latest report on the country puts growth this year at under 1%, down from its previous 1.1% estimate, and forecasts growth in 2017 of about 1% – down from a 1.25% estimate.

The IMF says Italy will not reach pre-crisis levels until 2025, by which time its neighbours will have economies 20-25% above 2008 levels.

Italy is the third largest eurozone country.

It has 11% unemployment and a banking sector in crisis, with government debt second only to that of Greece."

Italy has been in decline for a long time. The eurozone was supposed to help. It didn't.

"Italy's experience within the euro zone has been miserable. It has been in recession for five of the past eight years. Real (ie, adjusted for inflation) GDP per person is lower than in 1999. Sovereign debt has risen above 130% of GDP. Worse, Italy's economy is woefully uncompetitive. Since 1998 productivity has fallen steadily. Labour costs, however, have not. Since Italy joined the euro, exports have ceased to be a driver of growth, which has consequently slowed. A slowdown is not something a country with such daunting debts can afford.


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