Question

If Italy is Europe’s next debt crisis, 1/substantiate the reasons why the ECB should intervene and 2/ what should be the macroeconomic policy the ECB could put in place to mitigate the impact of an Italian debt crisis for the Euro zone?

Answer 1

The consequences of economic fluctuations happened in Italy in the European market. We saw several countries faced economic issues all over the nations in Europe like Greece, Portugal, Ireland, and Cyprus. Now the turn is for Italy threatens the eurozone market. The expansionary of the budget makes drastically hit the market of Italy in Europe. The recession like 2008 how it was influenced by economic activities like the same shadow cover the eurozone in Italy.

The Europe Union has taken several weeks to approve or reject the budget of Italy. The things are going wrong and the dried out the economy of Italy completely. The debt payments are increasing and it takes very hard to retrieve back the economic situation in Italy. The ECB(Europe Central Bank) seeks assist of the IMF (International Monetary Fund) try to figure out the Italian debt crisis in the Euro Zone. However, the economic imbalances make the reduction of bond value and share value later it affects to increase the unemployment more due to cost-cutting. These things terrified the neighborhood countries of Italy in the European market and the impact may spread into other countries which are associated financially with Italy eurozone. The ECB and IMF are taken certain measures to control the economic fluctuations in Italy and trying to make it compact the budget.