[ad_1]
economy
Italy is the most heavily indebted euro zone country after Greece, with a debt of more than 130% of gross domestic product(Photo: alliance photo / dpa)
Saturday, October 27, 2018
In the budget dispute between Brussels and Rome, the fronts harden. The Bundesbank proposes a solution: citizens should defend the debts of their state. It could also have another positive side effect.
The Bundesbank proposes to the government of Rome the introduction of a compulsory bond, with which the rich Italians are directly responsible for the debts of their state. "The Italian population would be obliged to acquire solidarity bonds, for example, according to the net badets of households," writes the head of the public finance department of the German central bank, Karsten Wendorff, in a contribution from the "Frankfurter Allgemeine Zeitung". With a "solidarity rate" of 20% and a tax deduction of € 50,000, almost half of the Italian government's debt could be converted into solidarity bonds. In the end, such a national problem would be solved by national solidarity.
Italy, after Greece, is the most heavily indebted euro country, with a debt-to-GDP ratio of more than 130% of gross domestic product. Nevertheless, the Italian government is planning new loans representing 2.4% of GDP in 2019 – three times more than promised by the European Commission. This regards the budget as a particularly serious violation of the EU rules. The fronts are hardened because Rome does not want to give in. Financial markets fear that the dispute will lead to a new debt crisis.
Strong private wealth in Italy
The Italian public debt is certainly high, but it faces a high private wealth, writes Wendorff to his proposal. "If Italy discharged its debt as promised and offered a fair return, Italian households would not be burdened." In addition, this would transfer the potential risks of a bankrupt state of the banking system to the wealthier Italian households.
Italian voters would also be very interested in sound public finances – and in a corresponding policy. Moreover, on the stock markets, the country's willingness to pay was less doubtful.
Source: n-tv.de
Source link
