After the global fiscal meltdown, major countries were affected in Europe. One of the severely hit included Greece, and there has huge economic crises going on ever since. Add to this the element of political instability; the crippled economy was dampened further. While certain inroads have been made in the political scenario, with finally a coalition been formed, Greece’s future in Eurozone is of uncertainty. As far as the recent trend is concerned, Italy seems to be following a similar path. This economic uncertainty in Italy is also being aggravated by political instability.
The Economic status quo
While Italy has had a better manufacturing base than Greece, the sharp increase in unemployment and investments is similar to Greece. As far as its performance in the status quo is concerned, Italy has normally done well by being the third highest economy. However, recent trends indicate it suffering in the similar pattern to Greece, Portugal and Spain. This can be correlated with the GDP which has been falling fourth quarter in a row.
As far as the economic debts are concerned, the situation doesn’t favor Italy either. Their economy may have fared well in the Eurozone, but their debts are now at a staggering amount of 123% of the GDP. This means that Italy is suffering from the same loss of market confidence that Greece had suffered from earlier.
Other Indicators and existence in Eurozone
When considering the difference between Italy and Greece in economic terms, Greece’s economy certainly did get deteriorated at a faster rate. As the recent scenario is concerned, Italy also projects a bleak picture owing to the poor performance of its services and manufacturing.
Next is the debate of whether or not stronger economies in the Eurozone would bail it out or not. In terms of analytical perspective, this seems not to be the case. There’s also the looming threat of Germany leaving the Eurozone. Since the fall of the Silvio Berlusconi in 2011, the situation has been on the decline. In Feb 2013, the stalemate of Italian elections came to an end.
However, EU is of the opinion that while its member would slowly recover, the aftermath of the recession can linger on further. When talking with reference to Greece and Italy, one of the main issues at hand includes debt crisis and also the associate budget tightening. The unemployment rate in Eurozone is at a record high of 12 percent. The figures for unemployment in countries like
Greece and Italy are on the rise and expected to cross the 25 percent mark this year. There have been analysis in reports that can be found at MarketMinder by Fisher Investments.
Both Italy and Greece are now to pursue difficult reforms and austerity packages as well. The situation in terms of recovery is worse in Greece and it is still a long way from growing. Italy’s stay in the Eurozone has also become uncertain in light of the new coalition that has emerged. If the political turmoil in the nation settles down, certain positive steps can be taken.