Photo: jennicatpink on Flickr
Everything’s looking grim in Italy.PM Silvio Berlusconi’s government is teetering on the brink of collapse, he and IMF chief Christine Lagarde are not on the same page, there’s no growth, and borrowing costs are spiking.
This weekend the FT even ran an editorial directed at Berlusconi saying: “In God’s name, go!”
Italy’s commitment to adequate reforms that will speed sustainable growth has come under question repeatedly during the EU summits last week and the G20 meetings this week. And there doesn’t appear to be an end in sight.
German Chancellor Angela Merkel even told reporters (via Reuters) that if Italy’s debt remains at 120% of its GDP, “then it won’t matter how high the protective wall is because it won’t help win back the markets’ confidence.”
With the fourth-largest economy in the European Union, Italy’s $2.2 trillion debt burden has investors running scared, regardless of austerity cuts.
It could just be the weak link that brings down the euro.
Too much emphasis on family means lots of small, privately owned businesses and few large, publicly owned companies.
In Italy, nobody moves! Not even between counties.
Source: European Commission
And -- because they can't get a job and move up the ladder -- immigrants aren't replacing Italy's ageing population.
No wonder all the Tunisians are going to France.
Source: European Commission
Particularly when Prime Minister Berlusconi makes a habit of appointing showgirls to powerful posts.
He tapped Mara Carfagna to be the Minister For Equal Opportunity and a member of his cabinet.
The first round of the Amanda Knox trial never met more than three times per week. Because a lawyer for the appeal was a member of Parliament, the second round normally met on Saturday mornings.
Source: Rolling Stone
And the fact that it's harder to do business in Italy than in any other OECD country (OK, well except Greece)...
It is more expensive to purchase electricity as an industrial producer in Italy than it is in any other EU state.
Italy's annual growth rate has been under 4% since 1988.
Source: World Bank
Over the last year:
Unicredit SpA: -36%
Intesa Sanpaolo: -50%
Banca Monte dei Paschi di Siena SpA (BMPS): -62%
Banco Popolare: -62%
Unione di Banche Italiane ScpA (UBI Banca): -62%
Though Berlusconi said he will step down in 2013, he is currently caught up in a sex scandal, is trying to weather increasing conflict with both his coalition ally and his finance minister, and just says lots of stupid things.
His coalition is teetering on the brink. Defections of two party deputies mean that Berlusconi no longer has the votes he needed from his party in the lower house of parliament to win a confidence vote last month.
Italy has recently been downgraded by Fitch's, Moody's, and Standard & Poor's.