Source: CCTV Finance
This summer, most of the eurozone countries are not having a good time. In addition to high temperatures and wildfires, affected by high inflation pressure and heavy debt burden, euro zone third largest economy partial disagreement within the Italian government has gradually increased, Italian Prime Minister Draghi has proposed to resign twice within a week .
Italian Prime Minister resigns twice a week. The president is reluctant to let go
Italian Prime Minister Mario Draghi : Even the heart of the central bank president is sometimes used. Thank you for the work you have done for me these days.
On July 21, Italian Prime Minister Mario Draghi went to the presidential palace again to submit his resignation. This was Draghi's second resignation in a week. This time, Italian President Sergio Mattarella accepted Draghi's resignation and asked him to continue to handle current government affairs as the caretaker cabinet prime minister. Former ECB President, it is difficult to solve the dilemma of Italy today
Draghi is 74 years old and is an economist. He served as the president of the European Central Bank for 8 years. 710 years ago, he was appointed as the "Super Mario" during the European debt crisis during the European debt crisis. He took drastic measures to rescue debtor countries and avoid the collapse of the euro zone. He was called "Super Mario". In February 2021, Draghi, who does not belong to any party, became the Italian Prime Minister. However, when Draghi, who had dealt with a lot of crises and had been through many battles, wanted to use his professional economics experience to govern Italy again, he found that this was not easy. Data shows that Italy's inflation rate in June was 8%, a record high in 36 years. Against this background, some domestic political parties in Italy advocate increasing subsidies to the people to cope with high inflation, but this means that government public debt will further rise. As of the end of the first quarter of 2022, the cumulative amount of public debt in Italy was 2.75 trillion euros , which is approximately RMB 19 trillion , which is equivalent to 152.6% of Italian domestic GDP. In Draghi's view, Italy's financial problems are serious at the moment, but the unity of the government no longer exists.
Italian Prime Minister Mario Draghi: There are more and more subtle differences and differences between political forces.
Deputy Director of the US and European Research Department of China International Economic Exchange Center Zhang Monan : In recent times, Italy's economic recovery has been weak and very high inflation. This is also an important reason why Draghi's resignation has accelerated the turmoil in the current Italian political arena. Italy's economic dilemma may trigger market turmoil in the euro zone
Draghi had no choice but to resign after the ruling alliance over fiscal spending. When he resigned for the first time, President Sergio Mattarella refused and advised him not to leave at this time. However, Italy's current economic difficulties may be far from being solved by "Super Mario" Draghi. As of May 2022, Italy has experienced a trade deficit for six consecutive months. On July 15, the Italian central bank predicted that Italy's GDP growth rate in 2022 will be lower than 1%, and the annual average inflation rate will reach 7.8%.
Director of the European Economic Research Office of the European Institute of the Chinese Academy of Social Sciences Sun Yanhong: Italy is the third largest economy in the euro zone, and its absolute debt scale is the largest in the euro zone. In addition, its government changes frequently. These factors make Italy easily the target of financial market speculation, and therefore it is easy to cause turmoil in the euro zone debt market. The European Central Bank hikes for the first time in 11 years The euro zone bids farewell to the era of negative interest rates A debt crisis that began in Greek in 2009 turned into European debt crisis . In the end, it was through the difficulties with a large amount of "blood transfusion" of EU . Today, 13 years later, the euro depreciates rapidly, European countries are under high debt and have serious trade deficits, which has also triggered discussions that Europe may fall into the European debt crisis again. On July 21, the European Central Bank announced a 50 basis point rate hike, and the eurozone has since bid farewell to the era of negative interest rates. This is the first rate hike by the European Central Bank in 11 years.
European Central Bank Governor Christina Lagarde: This decision was made based on the latest assessment of inflation risks and will help inflation rate return to the medium-term goals we set. The ECB's interest rate hike may "brake" economic growth Previously, the ECB would raise interest rates by 25 basis points or 50 basis points this time, the debate in the market was extremely fierce. is because a sharp interest rate hike can curb high inflation, but it may also "brake" economic growth.
interest rate hikes have pushed up lending costs, and the pressure on European companies has increased significantly. Sacmi Group , located in northern Italy, mainly produces large-scale machinery and equipment and parts. Recently, due to the serious increase in costs, borrowing has become increasingly difficult and it is difficult for companies to deliver goods. As the European Central Bank begins to tighten the monetary policy, it will be more difficult for Italy to borrow from the European financial market. hikes increase debt repayment costs. The debt crisis may be brewing.
Recently, International Monetary Fund President Georgieva warned that As central banks raise interest rates to curb inflation, raising the debt repayment costs of vulnerable countries, a global debt crisis is brewing. Recently, the debt of energy and utilities in Europe has exceeded 1.7 trillion euros (approximately RMB 11 trillion), an increase of more than 50% from before 2020. While corporate liabilities increased, the European Central Bank was struggling. The total assets and liabilities of the European Central Bank rapidly expanded from 1.3 trillion euros (about 9 trillion yuan) in 2008 to the current 8.8 trillion euros (about 60 trillion yuan), an increase of 5.77 times. As of the end of the first quarter of 2022, the scale of the national bonds of the euro zone in was 11.97 trillion euros, equivalent to over 82 trillion yuan.
