02:40 GMT21 October 2020
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    The difference in economic development between Italy and the rest of the EU may prompt Rome to abandon the European currency and effectively secede from the Eurozone.

    As the level of prosperity and economic development in Italy differs significantly from the rest of the EU, eventually the nation may decide that the single European currency is a hindrance rather than a boon to its economy, according to Clemence Fuest, notable German economist and head of the Ifo Institute for Economic Research.

    "The level of prosperity in Italy is currently at the level it was in 2000. If nothing changes, the Italians may decide that they no longer want this Eurozone," Fuest told Tagesspiegel.

    He also noted that a whole new set of problems for European taxpayers may arise if Italy turns to the European Stability Mechanism for economic aid, as earlier the European Central Bank (ECB) offered to buy an unlimited amount of Italian government bonds should Rome require assistance.

    "Therefore, it’s the ECB that will decide the size of loan Germany should grant to Italy; under these circumstances the Bundestag definitely shouldn’t approve the ESM program," he said.

    But even without the threat of Italy leaving the Eurozone, EU stability appears to be rapidly deteriorating, the Ifo chief added.

    "The European Union is increasingly drifting apart. This has already become clear with the Brexit vote, but in the meantime, countries in the East are increasingly distancing themselves from Europe. This is dangerous, and what Europe really needs now is stability," Fuest explained.

    He specifically pointed out that despite the regulatory measures previously implemented by EU authorities, European banks still remain quite vulnerable to the effects of financial crises, suggesting that Brussels should take pointers from the US in that area.


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