An Italian financial crisis is certain – the big question is how contagious it is | Larry Elliott
The EU can rewrite its rules and let governments borrow more to counter the crisis or let Italy go the way of Greece
The Italian government's decision to suspend mortgage payments for its quarantined citizens is a drastic step in the battle to mitigate the impact of the coronavirus, but commensurate with the predicament the country finds itself in.
Italy is the eurozone's weak link. Even before the current lockdown it was facing a fourth recession in little more than a decade and there has been only minimal growth in living standards in two decades. Its manufacturing sector is dominated by low-cost producers vulnerable to disruption in the global supply chain. Government debt is high, its banking system is weak and it is a strategically important economy, the eurozone's third biggest.
Related: What if the rest of Europe follows Italy's coronavirus fate?
Continue reading...