Wolfgang Münchau, an
influential economic editor of the British newspaper Financial Times, warns
that the defeat of Prime Minister Matteo Renzi in the constitutional referendum
could provoke Italy's departure from the Economic and Monetary Union.
On December 5, "Europe
can awaken under the threat of disintegration". The statement comes from
the influential editor of the Financial Times (FT) Wolfgang Münchau who warns
that the defeat of Prime Minister Matteo Renzi in the constitutional referendum
on December 4, as most polls show, could lead to Italy's exit from the euro zone
.
Renzi said he would resign if
he lost "the referendum and that the three main opposition parties
are" out of the euro "- the Five Star Movement, the Force Italy and
the Northern League - which would be enough for investors to conclude
"that the game is over."
Since the country adopted the euro in 1999, "total factor productivity, the share of economic output not explained by labor and capital, has fallen in Italy by about 5% since then, while in Germany and France it has increased by about 10%. "
Moreover, according to the FT journalist, the imposition by the EU of austerity policies, instead of "building a proper economic and banking union after the 2010-2012 eurozone crisis" has contributed to Positions favorable to the break with Economic and Monetary Union.
Since the country adopted the euro in 1999, "total factor productivity, the share of economic output not explained by labor and capital, has fallen in Italy by about 5% since then, while in Germany and France it has increased by about 10%. "
Moreover, according to the FT journalist, the imposition by the EU of austerity policies, instead of "building a proper economic and banking union after the 2010-2012 eurozone crisis" has contributed to Positions favorable to the break with Economic and Monetary Union.
Italy's exit from the
eurozone, expected by Münchau, "would bring the greatest breach of
history," he warns.
"Foreign currency holders denominated in euro would be paid in exchange for highly devalued [Italian] liras. Since banks do not have to hold capital against their participation in government bonds, the losses would force many European banks to go into immediate bankruptcy. Germany would then realize that a huge current account surplus also has its drawbacks. There is a great deal of German wealth waiting to be a victim of default. "
"Foreign currency holders denominated in euro would be paid in exchange for highly devalued [Italian] liras. Since banks do not have to hold capital against their participation in government bonds, the losses would force many European banks to go into immediate bankruptcy. Germany would then realize that a huge current account surplus also has its drawbacks. There is a great deal of German wealth waiting to be a victim of default. "
Saisi!
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