Italy's ‘Perma-Recession' Could Trigger a €2 Trillion Financial Crisis That Threatens the Eurozone Itself

Economists in Milan and London are debating whether Italy is carrying so much debt that it might collapse into a Greek-style financial crisis, Business Insider reported. Their fear is that because Italy is so much bigger than Greece — and because Italy is one of the Big Three economies underpinning the eurozone — that the scale of such a crisis might be more difficult to contain this time around. It also underscores the un-resolvable contradiction at the heart of the European Central Bank (which governs the 19 countries that use the euro as a currency): Once a country gets into too much debt, European Union austerity rules that limit government spending militate to reduce that country's economic growth. At the same time, the ECB's rules make it impossible for a country to exit the euro without plunging itself into the financial crisis it is seeking to avoid. Read more

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