Recession risk pushes Italy closer to a financial and political earthquake

Posted by On 7:50 PM

Recession risk pushes Italy closer to a financial and political earthquake

Italy’s economy has stalled abruptly over the summer and the industrial sector is on the cusp of outright recession, threatening to drive the country’s knife-edge debt dynamics into dangerous territory.

The sudden slowdown comes as mounting political alarm pushes risk spreads on 10-year Italian debt to a five-year high of 290, a sign that capital outflows are picking up again.

Markets are increasingly nervous as the insurgent Lega-Five Star government draws up sweeping plans for tax cuts and welfare spending in the 2019 budget, risking a bare-knuckled fight with Brussels over EU fiscal rules.

Italy’s debt trajectory is acutely vulnerable to any change in the pace of nominal GDP growth or any...

Source: Google N ews Italy | Netizen 24 Italy

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