Sputnik discussed this with Dr. Richard Wellings — Deputy Research Director at the Institute of Economic Affairs.
Sputnik: In your view was is Italy's government rejecting the European Commission's proposals?
Dr. Richard Wellings: Well, it's very simple the governing parties were elected on a particular agenda which included some rather modest protections __ 0.15 and some rather modest tax cuts and they're basically trying to implement the policies that they were voted in for, so the exercise of democracy, I think there's also an element, given that they are broadly уurosceptic, they're trying to stand up to the European Union and its bullying that Italy has been subjected to for a number of years now, I think that's also popular with their voter base.
Sputnik: Just explain for our listeners then how does the government in Italy benefit from insisting on its budget then?
Sputnik: And how dangerous is the situation with Italy's debt at the moment? We're talking about 132% to GDP in terms of debt, it's a huge amount, although I was in Milan over the weekend and it didn't look as though it was a country struggling with debt and austerity but I'm sure Milan doesn't show the whole of the Italian country, how can they survive with this amount of debt do you feel?
Dr. Richard Wellings: That's right, of course, Milan is in northern Italy which for decades now has been far richer than southern Italy and parts of southern Italy are really struggling with horrendous levels of youth unemployment around 50% plus in some towns and this is potentially hugely dangerous, as you said, there's an enormous debt and the problem is a lot of this debt is held by French and German banks, so if there was to be some kind of default this could stabilize the whole Eurozone banking system and lead to the need of a massive bailout potentially, so potentially a nightmare scenario.
Sputnik: Is cutting Italy's debt payments an option for the European Commission? And if it is, we know the history with regard to the struggles and woes that the European Union has had with Greece it slowly getting back to some sort of semblance of order, it's been through a huge period of austerity and pain, is that what we're going to have to see with Italy? Is that what their population is going to have to experience?
The views expressed in this article are solely those of Dr. Richard Wellings and do not necessarily reflect the official position of Sputnik.