|The News Line: News
Thursday, 3 January 2019
Eurozone may break apart this year! warns CEBR
THE EUROZONE risks breaking up this year, the Centre for Economic and Business Research (CEBR) warned in its annual predictions for 2019. The influential think tank said yesterday that ‘internal contradictions’ will force the region to ‘integrate economically’ or dissolve.
The centre added: ‘It is possible to defer the confrontation for a year or two but the boil will have to be lanced at some point since the Italians have clearly reached the point of austerity fatigue.’
Meanwhile, the European Central Bank has appointed temporary administrators for Italian bank Banca Carige. The bank belly-dived into bankruptcy forcing the majority of the bank’s board members to resign on Wednesday.
The ECB said in a statement yesterday that it had appointed three temporary administrators and a surveillance committee to replace the board of directors and to ‘take charge of Banca Carige’.
‘The resignation of the majority of the board made the installation of temporary administration necessary to steer the bank in order to stabilise its governance and pursue effective solutions for ensuring sustainable stability and compliance,’ the ECB said.
However, European capitalists fear that the collapse of Banca Carige will trigger other Italian banks to go and that this in turn will have a knock-on effect on other heavily indebted European economies, like Spain, Portugal or Ireland.
In fact, shares of other Italian lenders fell following the announcement, with UBI Banca down 3.8 per cent and BPER Banca by 3.4 per cent. Italian debt now stands at 131.8% of its GDP (Gross Domestic Product).
When a country’s debt reaches over 100% of its GDP it is state bankrupt. The world’s largest asset manager BlackRock said that there is a ‘heightened risk of recession’ and that there are a number of ‘political hotspots’ within the European Union which have the potential to ‘spook the markets’.
The head of markets and economic research at BlackRock cited both the ‘Yellow Vests’ uprising in France and the row between the Italian government and the EU over their budget as having the potential to trigger a Europe-wide crash.
Please create your own account. As a registered user you will gain more access to this website. Related Links
Most read news in The News Line:
Average Score: 0|
Send to a Friend