Italy today is a “zombie state” that survives thanks to economic support measures. This is stated in an article by the Finnish edition of HBL on August 16.
At the beginning of 2020, Italy’s debt was € 2.4 trillion. It is noted that at the end of the year, the country’s national debt will reach € 2.6 trillion, which will be about 155% of GDP, and by the end of 2021 – € 2.7 trillion. Thus, the budget of this state is underfunded by 11% this year.
In the fall, Italy must repay bonds for € 120 billion. The publication notes that the republic will not be able to cope with this without the help of the European Stabilization Mechanism (ESM Fund), the European Central Bank and the EU countries. If aid does not arrive, the entire eurozone will be in crisis, leading to the collapse of the euro.
“The fund was created because other EU member states felt it was cheaper to support Italy than to allow the country to suspend payments and thus trigger the euro crisis,” the statement said.
The publication notes that the ESM Fund is “too small” and will not be able to lift Europe until 2021-2023.
“Thus, the rest of Europe is completely dependent on Italy and it should not be surprising that the country managed to squeeze out the largest contribution of around € 80 billion through the recovery fund. Europe can now dance to the tune of Italy, ”the newspaper concludes.
It is noted that the cost of “private money holdings” in Italy is four times higher than the country’s GDP, and many of its taxpayers “are clearly richer on average than, for example, in Finland and Sweden.”
In May, Anna Bodrova, senior analyst at IAC Alpari, expressed the opinion that China, the United States and Germany would be the fastest to deal with the economic consequences of the coronavirus pandemic. She admitted that Italy will come out of the crisis “long and sadly”, because even before COVID-19, the country had big problems with the budget and the national debt, and the pandemic only exacerbated the condition.