Posted on 05/30/2018 1:13:16 AM PDT by Berlin_Freeper
Political chaos in the euro zone's third-biggest economy won't be going away anytime soon, according to International Monetary Fund former chief economist Olivier Blanchard, who on Tuesday issued an ominous assessment of the country.
Panic roiled markets Tuesday as a political fight in Italy prompted one of its worst market sell-offs in years. Underlying investor fear was the prospect of Italy leaving the euro and others following suit, which Blanchard, now an economics professor at the Massachusetts Institute of Technology, described as more of a psychological fear than a realistic threat.
The potential concern, rather, involves Italy's creditors, who would have to "move carefully," the economist told CNBC's Joumanna Bercetche in Paris. The rest of Europe may avoid a domino effect, but Italy looks to remain mired in a quagmire.
"I suspect in this case the EU will do whatever is needed to prevent contagion, so I'm not terribly worried about contagion," Blanchard said. "I'm very worried about Italy. Not worried about the rest of Europe. It will be tough, but the rest of Europe, the rest of (the) euro will be OK."
(Excerpt) Read more at cnbc.com ...
ITAL-EXIT
Losing Italy will mean that others will follow them out the door.
They are going to let this drag on for a while.
Oettinger let the cat out of the bag when let slip that “markets will teach Italy not to vote for populists”.
In 2011, the ECB refused to stabilize Italy until Berlusconi was forced out.
But it is a dangerous game. Threats against politicians work. And threats worked in the Greek referendum.
But threats against voters can backfire and make them more determined.
bmp
I’m starting to wonder if the Euro is even needed these days. You do the transactions with plastic, or other electronic means, and the conversions are instant. No more Euro will speed up the remain cash-only businesses, like some of the taxis, to take plastic.
I can see some areas where standardization is important, like the size of plywood, for example - but I don’t think a common currency is nearly as important as it once was.
“They’re worried about losing their grip over Italy.”
Italians are more worried about losing their grip over Italy. Hopefully the Italians prevail.
Losing their grip over Italy? Snort. They have Italy by the short hairs. The EU will kick out Italy before Italy gets up the guts to leave.
Vassal states of EUNaccountable bureaucrats have no rights. Your sovereignty has been overshadowed by psychopaths.
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