Could Italy Bring Down The Euro?
By Tyler Durden
Submitted by Soeren Kern via The Gatestone Institute,
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A move by Italy — the third-largest economy in the eurozone — to abandon the euro could strike a potentially fatal blow to the currency and to the bloc itself.
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Meanwhile, at more than 130% of GDP, Italy has one of the biggest public debt burdens in Europe, second only to Greece.
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“A perfect storm of slow or zero Italian economic growth, low interest rates and politically connected, often corrupt, lending have combined to create a situation where the Italian financial system is in need of a large rescue.” — Mihir Kapadia, Sun Global Investments.
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M5S blames the euro for Italy's woes, and many Italians agree.
The eurosceptic Five Star Movement (M5S) has overtaken Prime Minister Matteo Renzi's Democratic Party (PD) in several opinion polls and is now the most popular political party in Italy.
The poll results represent a significant shift in Italy's political landscape and have potentially far-reaching implications for the future of the European Union.
M5S, which would win national elections if they were held today, has called for a referendum on whether Italy, which is facing the collapse of its banking system, should keep the euro, the single currency of the European Union, or bring back the Italian lira.
A move by Italy — the third-largest economy in the eurozone — to abandon the euro could strike a potentially fatal blow to the currency and to the bloc itself.
An Ipsos poll, published by the newspaper Corriere della Sera on July 5, gave M5S 30.6% of the vote, up from 28.9% in April, while Renzi's center-left PD fell to 29.8% from 31.1%.
A Demos poll, published by La Repubblica on July 1, gave M5S 32.3% of the vote, compared to 30.2% for the PD. An EMG Acqua poll for TeleGiornale La7 television on June 28 gave M5S 31.7%, compared to 31.2% for the PD.
According to Ipsos pollster Nando Pagnoncelli, the polls show that M5S “is increasingly viewed as a political force that is capable of governing the country.”
The anti-establishment M5S was founded in 2009 by Beppe Grillo, a well-known comedian and blogger who has led a popular fight against rampant corruption in Italy's political system. The party advocates for direct democracy — a system in which political decision making is devolved from the government to citizens — as a way to bypass traditional political parties embroiled in corruption scandals.
M5S, which portrays itself as post-ideological and draws support from both the left and right sides of the political aisle, has leveraged the internet to attract millions of voters, especially among the young.
The 67-year-old Grillo recently handed over the reins of the party to a new “directorate” of five young leaders, of which 30-year-old Luigi Di Maio has become the most prominent. He is widely expected to be the party's candidate for prime minister at the next election.
M5S achieved a major breakthrough in municipal elections on June 20, when it won 19 out of the 20 cities — including Rome and …read more
Source: Could Italy Bring Down The Euro?
