The economic policies of the Biden administration comes to Southern Europe
The global trend for huge fiscal stimuli, led by the United States, is facing a test in Southern Europe, writes The Wall Street Journal.
Italy, Greece and Spain – which have been hit hard by the debt crisis in Europe for decades – are once again preparing for huge budget deficits and plans.
The Italian Prime Minister Mario Dragi and other leaders in the region are committed to ambitious investments that will ensure a sustainable and long-term impact. If the pledge turns out to be a loss, these countries will be burdened with new mountains of national debt and will be charged with the same amount of debt to the borrowers.
After years on budgets with little room for maneuver, the countries of Southern Europe see a chance to revive their economies.
Dragi, who presented the plan to the Italian parliament, stated that it included “the fate of the state”.
Many countries are accepting the conviction of US President Joe Biden that aggressive fiscal stimulus will not only improve the economy, but also damage it.
The European Union, which for years has promoted balanced budgets, which include sick measures, is joining. At the center is the European fund for the restoration of the value of € 750 billion. The mix of grants and cheap loans will be financed through general bonds and aims to support investment in increasing productivity, sustainability and sustainability.
Dpagi, ĸoyto ĸato ppezident na Evpopeycĸata tsentpalna banĸa izigpa ĸlyuchova polya in obezvpezhdaneto dalgovata na bomba, ĸoyato zaplashvashe ea clozhi ĸpay na obshtata valyta ppez 2012, cega ima pedĸiyat shanc naictina ea paztapci zaĸacalata italiancĸa iĸonomiĸa.
Since the 1990s, Italian leaders have been trying to transform the economics of the economy and at the same time to implement almost balanced budgets. Dpagi is the first who will have the financial power to help.
Italy’s economy has fallen by more than 1% a year since the last quarter of a century. The state did not fully recover after the financial and subsequent debt crisis, and in 2020 it will increase by 9%.
Italy will receive the most funds – around € 190 billion, of which € 70 billion. ca gpantove. The country will add another € 60 billion. from the know-how, in order to finance the investment plan.
Italy’s debt reaches 156% of the economy, and that of Greece – 206%, the highest level in the developed world after Japan.
The largest part of Greece’s debt is in the form of savings loans from the remaining part of the euro area, which should not be paid.
The main long-running issue is the much larger economy of Italy. So far, the financial markets are not calling for a boost, mostly because of the expectation that the ECB will continue to buy bonds and that it will owe debt.
But in the long run, market pressure may appear.
Although the idea behind the fiscal packages in the United States and Europe is one and the same, in the United States the scale is far greater. So far, the largest economy in the world has adopted fiscal measures at a value of 26% of the BBC.
