Rome on collision course with EU as Italy plunges into ‘unmanageable public debt’ crisis
Coronavirus impact will be ‘very tough’ on Italy says expert
Italy is set for a dramatic showdown with Brussels this year after Covid ravaged the country’s economy. One leading Italian political analyst told Al Jazeera that “Italy is one of the worst-off countries in Europe on the number of deaths and the economic impact”. Italy has the second-highest public debt in the EU and its economy was already struggling well before the pandemic struck Europe.
Speaking to Al Jazeera, Giovanni Orsini said: “What we do know is that the economic impact of all this will be very tough.
“Italy will come out of this with almost unmanageable public debts. That is a certainty.”
Italy’s GDP is predicted to have shrunk around 10 percent in the last year.
Italy and the EU have repeatedly clashed in recent years with Brussels accusing Rome of defying the bloc’s fiscal rules.
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This economic catastrophe comes as Italy descends into another political crisis with Prime Minister Giuseppe Conte scrambling for his political life.
On Monday, Mr Conte will try to build a new majority and stay in power before a parliamentary vote of confidence following the collapse of his ruling coalition.
Last week, former Italian PM Matteo Renzi pulled his tiny but crucial Italia Viva party from the ruling coalition, sparking a political firestorm and stripping Mr Conte of his majority.
His small party had previously backed the Five Star Movement and the Democratic Party, which have been in coalition together since mid-2019.
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Mr Renzi criticised the Government’s handling of Covid-19 and its plans to relaunch the economy.
He criticised Mr Conte for ruling through undemocratic decrees and lashed out at the way that the PM planned to spend the €209bn (£186bn) from the EU’s pandemic relief fund.
In response, the Five Star Movement rejected Mr Renzi’s demand that Italy apply for a loan from the eurozone’s bailout fund, known as the European Stability Mechanism (ESM)
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They claimed that the loan scheme could come with brutal political and economic conditions from Brussels.
If the ruling coalition collapses, it is thought that a far-right coalition between Lega and the Brothers of Italy, who are polling first and third in the country, would win a snap election.
Lega party leader Matteo Salvini has called for Prime Minister Conte’s immediate resignation and fresh elections.
Another leading EU nation has similarly been plunged in crisis in the past week.
Dutch Prime Minister Mark Rutte’s government resigned last Friday, accepting responsibility for wrongful accusations of fraud by the tax authorities.
An election has already been scheduled for March 17, as crisis comes with the Netherlands in the midst of the toughest lockdown of the COVID-19 pandemic.
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