Graph shows how Italy's debt turmoil MORE WORRYING than Greece, bankruptcy 'IMMINENT'
GETTY Lega leader Matteo Salvini and Prime Minister Giuseppe Conte
This summer the populist coalition of Lega and the Five Star Movement swept to power on promises of lower taxes, higher public spending and pension reform. And, while their northern European counterparts fully expected them to break their election pledges, it appears Lega leader Matteo Salvini and Prime Minister Giuseppe Conte are going to stick to their spending plans. But right-wing think tank Gefira believes the policy will add €125bn euros a year to a debt mountain that already stands at €2,300bn - a much worse situation than Greece faced before its collapsed into financial meltdown in 2009.
Italy’s national bankruptcy is imminent and the next financial crisis can soon be triggered off by problems of the Italian banks Gefira
It said most of the debt was owned by Italian banks and insurance companies whose financial positions were already weak and warned of a Greek-style economic meltdown. Last year the Italian government bailed out Banca Monte dei Paschi di Siena at the expense of the tax payer despite objections from the European Central Bank (ECB). Gefira claims the ECB is unwilling to get involved with Italy’s populist leadership and quoted EU budget commissioner Günther Oettinger who told Deutsche Welle the turmoil on the country’s financial market was “a signal to Italian voters not to vote for populists from left and right”.
gefira.org The Gefira graph showing Italy's debt
Mr Oettinger later issued a statement and apology, saying he fully respected “the will of voters being left, right or centre and in every country.” But the think tank said: “Italy’s national bankruptcy is imminent and the next financial crisis can soon be triggered off by problems of the Italian banks, which the ECB and Brussels’ technocrats are unwilling to rescue, all the more so since Lega and Five Star Movement are are in power.”
GETTY Matteo Salvini's Lega swept to power with promises of increased spending