The Economic Recession Of Italy

Public debt is vexatious, but it is unlikely to precipitate a complete collapse of the American economy. Moreover, the sharp increase in public debt since the 2008 recession is within reason. The 2008 recession caused the loss of millions of jobs, which in-turn resulted in two notable effects—a reduction in government revenue due to diminishing tax receipts, and an increase in government spending due to an increase in unemployment. This exact paradigm occurred in virtually all

According to the 2017 Index of Economic Freedom (The Heritage Foundation), Italy is ranked 79th in economic freedom, whereas, the United States is ranked 17th. The economy status in Italy has faced many challenges including political and financial hardships. Since 2011, public debt has been on the rise and currently sets at more than 130 percent of GDP. (http://www.heritage.org/index/country/italy, 2017) Some of the opportunistic areas found in Italy include technologies, renewable energies, valuable consumer goods, and engineering products. (Capuano, 2011) The country has a population of 62 million and GDP of $2.2 trillion, which has shown continual growth over the past three years. Out of the total GDP, services make

Along with the most significant outcomes of the current crisis has been a sharp increase in the concern concerning national debt. Certainly, what nourishes debt accumulation is deficit expenditure. The 1996 era, and throughout 2001, show up as "golden years" from the time where distinct development was done in reducing accumulated debt2. Stuck between 2001 and 2007 that development was obliterated. Consequently, at the period of the crisis years 2007-2010, declining federal returns and attempts to fix the economy and financial system radically enlarged the debt to GDP ratio.

The 2007-2009 financial crisis is generally considered to be the worst since the Great Depression of the 1930s. It famously led to some major financial institutions such as Lehman Brothers to collapse while many others including HBOS and the Royal Bank of Scotland had to be bailed out by the government. The stock market crashed, unemployment escalated and we were plunged into a recession sometimes referred to as the Great Recession. Although the recession is now considered to be over, its effects can still be felt in the form of high rates of unemployment and an incredible rise in our country’s debt. This essay will aim to succinctly and coherently explain what happened during the 2007-2009

Italy over the years has established itself as one of the most developed and powerful countries in all of Europe. Although this all may be true, it has not seen a great deal of recovery after the debt crisis that affected all of Europe and is falling behind in terms of globalization. After World War II, Italy had an economic miracle fueled by the Marshall Plan that allowed its economy to flourish. This huge growth was later stagnated and then in 2008, Italy was hit with a recession that it has had a hard time recovering from. This slow recovery is making Italy an outsider in the view of Europe, and Italy has seen this slow recovery from the recession because of low growth, low productivity, corruption, and a split between the north and the

The Eurozone is facing a serious sovereign debt crisis. Several Eurozone member countries have high, potentially unsustainable levels of public debt. Three—Greece, Ireland, and Portugal—have borrowed money from other European countries and the International Monetary Fund (IMF) in order to avoid default. With the largest public debt and one of the largest budget deficits in the Eurozone, Greece is at the centre of the crisis. The crisis is a continuing interest to Congress due to the strong economic and political ties between the United States and Europe.

In Europe, as it is plagued by high unemployment, feeble wage gains, and a decent credit market the international recession continues to thwart economic recovery. These factors set tremendous restraint on consumer disbursement and company investment, the latter of which is restricted to considerable excess capacity and issues about the durability and sustainability of recovery. Italy and Spain carry on to fight, while Germany has gained from exports to China, and Greece has become practically insolvent. In reality, in accordance with the panelists, all holders of Greek bonds must take a 30 % "haircut" on

As Europe slipped into recession in 2009, a problem that started in the banks began to affect governments more and more, as markets worried that some countries could not afford to rescue banks in trouble. Investors began to look more closely at the finances of governments. Greece came under particular scrutiny because its economy was in and successive governments had racked up debts nearly twice the size of the economy. The threat of bank failures meant that the health of government finances became more important than ever. Governments that had grown accustomed to borrowing large amounts each year to finance their budgets and that had accumulated massive debts in the process suddenly found markets less willing to keep lending to them. Hence, what had once begun as a banking crisis became a sovereign debt crisis.

However, the post-crisis public debt issue was not just a European trend. The world’s government

Background: From 2009 onwards several Eurozone countries have come under pressure from the financial markets as a result of rising debt levels, economic contraction and decreasing solvency indicated by all major rating agencies. Through raising funding prices on the markets and the lack of trust in these Eurozone members – they were not able to finance themselves to sustainable costs anymore. One country after the other (Greece, Ireland, Portugal, Spain and Cyprus) had to be “rescued” by the then established financial support measures such as the European Financial Stability Facility (EFSF) and the European Stability Mechanism (ESM). In exchange for these “bail-outs” countries had to fulfill certain economic conditions – mostly spending cuts – which led in turn to political change and instability.

Italy’s mixed economy is a moderately free economy, rated 80th most free economy in the world in 2015 according to the Index of Economic Freedom ("Italy," 2015). Currently, public debt is high, despite new government policies and goals to reduce debt; it has increased to 2.39 trillion USD (Totaro & Salzano, 2015). Italy’s banking industry, like other counties within the EU as well as the US have taken a hit from the recession. Italy is known for its small local community banks, many are at risk of merging or going away due to new regulations.

Italy is a country that has gone through many changes throughout its history. It has faced many obstacles but has remained nationalistic and eager for unification.

First off, Italy relies primarily in the service sector. This is the best way of increasing its economy. The service sector consists of almost three-fourths of Italy’s total GDP (“Economic Forecasts”). It makes up

Italy will be hosting a “Renzi-fied” constitutional referendum this upcoming 4th of December and expect their voters to decide whether they approve of altering the constitution to restructure the legislative process by effectively reducing the upper chamber’s power.

The high public debt poses a threat to financial stability and is the largest hurdle for the pro-growth measures of the Italian government to boost the economy more strongly. With debt at 132% of GDP and 270% of the individuals’ tax base, the key for the debt sustainability lies in the ECB ability to keep