Prof Philip Booth comments on market fears
“It is not inevitable that the EU debt crisis spreads to Italy but the long-run economic fundamentals there are poor. Economic growth is very slow and will not improve unless there is radical economic reform – which looks unlikely. As such, the debt burden is unlikely to fall and, if the Italian government cannot service the debt, the EU will discover what has been clear all along: we cannot simply repackage bad debts in the hope that they will go away.
“Sovereign default in the eurozone will become a reality that cannot be ignored. Unlike with Greece, there are no pockets deep enough in which to hide Italian bad debt.”
Notes to editors
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