Ashoka Mody, (2018), “Italy’s Budget Isn’t as Crazy as It Seems”, Bloomberg Economics, 26 Οκτωβρίου
Europe’s leaders have come down hard on Italy for its plans to increase spending with the aim of boosting growth and helping the poor. What they fail to recognize is that a little stimulus might be just what the Italian economy needs.
The outlook for the global economy is deteriorating more rapidly than forecasters realize. A slowdown in China has hit global trade, European exports are decelerating, and euro-area business sentiment is sharply down. All this can’t help but affect Italy, where industrial production is barely increasing and a recession may be imminent.
This is the context in which one should judge the increasingly strident debate between Brussels and Rome. The new Italian government, led by the right-wing League and the anti-establishment Five-Star Movement, proposed a fiscal stimulus that would cause the budget deficit to rise to 2.4 percent of gross domestic product next year. The European Commission rejected the plan as irresponsible, sparking a showdown that has included an episode of shoe-banging in the European Parliament and a crude exchange of words on Twitter. Amid the discord, the yield on Italy’s 10-year bonds has kept rising.
Σχετικές Αναρτήσεις
- Blanchard O., Zettelmeyer J, (2018), «The Italian Budget: A Case of Contractionary Fiscal Expansion?», Peterson Institute for International Economics, 25 Οκτωβρίου
- Fergal O’ Brien, (2018), «The Long and Winding Road to Italy’s Budget», Bloomberg Europe, 13 Οκτωβρίου