Euro Crisis Depends ion ario Monti’s Guidance

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The future of the world economy depends greatly on the Euro crisis. The outcome of the Euro crisis depends heavily on what happens in Italy. The new governments success will rely greatly on Mario Monti’s guidance. Mario Monti is in the best position as EU commissioner, to respond successfully to the challenges that arise. In turn, overcoming their financial difficulties and creating stable economic growth over a longer period of time (TheEconomist, 2013).

Firstly, the Euro is stable and shown growth in both exchange rates and within the country. However, there is still a banking, financial and fiscal crisis within Italy. The stock markets have plummeted. Approximately, fifty percent of Italy’s debt is held by oversees investors. If Italy defaults on their debt, it could potentially cause great damage to other countries. Italy’s current debt is at one hundred and twenty percent of its GDP. The economy is at a complete stand still and cannot afford to pay back the interest on its loans (TheEconomist, 2013).

In the past, Italy was able to devalue its currency and raise money selling more of its well know brands like Versace, Gucci and Prada overseas. But, it cannot do that anymore. This economy is the third largest in the Euro zone. Also, the Italian Bond Market is struggling extremely. After the United States and Japan, Italy is the third largest country to issue bonds than anyone else in the world. It currently owes international investors approximately three trillion dollars. The current fear is if Italy was to default, there aren’t any European financial institutions that could bail Italy out (TheEconomist, 2013).

In November 2013, Italian leaders said Italy’s current economic situations posed a threat to the Euro...

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...omic crisis since the World War. The Italian people are suffering the most from the deficit, as they cannot control how the government works. With the government increasing the taxes, more Italians are trying to figure out how they are going to pay their bills. The interest is compounded daily, and many people of Italy simply cannot pay it. Therefore, they are taking their own lives due to their financial instability and inability to pay. Additionally, everything is increasing in Italy; the electricity and gas rates are skyrocketing. But, the jobs available are decreasing as many business owners are closing their business due to the current situation. The Italian Government’s inability to pay their debt is very concerning for the people of Italy. The future is not looking bright and there is much uncertainty where the country will be within the next year or so.

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