italy - 'horrible martyrdom'
WORKERS, JUNE 2005 ISSUE
The US insurance company Banque AIG's analysis of Italy's circumstances in the Euroland financial never-never land reads as a nightmare. Italy faces a "horrible martyrdom", with possible 20% devaluation required as a desperate measure to avoid slump and collapse.
Italy's situation is compared to Argentina in 2000 just before the South American country crashed after pegging its currency to the US dollar. Italy is expected to break the EU's deficit ceiling of 3% by double that figure.
Italian exports have crashed by 30% since 2000. Public debt stands at 105% of GDP and is still rising — over US$192 billion. "Draconian" cuts in public services are being mooted.