Italy is undergoing a major economic crisis, and many in the country are blaming France and Germany for the economic problems Italy is facing.
The issue is Italy’s level of debt and their inability to print currency, which is caused by their inclusion in the European Union. France and Germany are the biggest proponents of a single currency for the EU with countries like Italy and Greece with smaller economies who are beholden to the larger members of the EU left without financial leverage to cope with their debt.
The problems the Italy is facing are very comparable to the ones that hit Greece during their own economic crisis. Insufficient tax revenues to offset spending and a stake economy to boot. Tax revenues in Italy are significantly lower due to massive financial tax evasion in the country.
These economic problems are posing risks for the world economy at large. Financial crisis in one country impact others in unknown and unpredicted ways. A loss Of confidenc in Italy can spell financial problems in other countries and raise the cost of borrowing. Further, it can put pressure on some of the other minor countries and Their economies.
The economic crisis in Italy has a ready cause problems for their political reality. Emily is an important component of the EU, which is still the largest economy in the world. How this will impact the larger global economy remains a major risk for financial markets and for international companies in the global economy.
The booming economy of India is expected to grow at a robust average rate of 7.7% GDP through 2019 and is predicted to outpace the economy of China. The latter is in line for a projected growth of rate 6.6% — still pretty good by U.S. standards. The United States is still hoping to achieve 3% growth rate by the end of 2018.
What’s driving a booming Indian economy is a surge in private consumption by an ever-growing middle class with more discretionary money to spend. India is also now getting beyond some transitional measures made in currency exchange policy and the recently enactment of a national good and service tax.
Other factors helping India is more private investment, better productivity and a variety of structural reforms implemented by the government of Prime Minister Narendra Modi.
India’s best economic performance came in 2010 when it achieved a red hot 11.4% growth rate. But it has remained above a comfortable 6% growth rate since then — enough to keep moving this diverse nation of 1.32 billion people out of the economic backwaters it was mired within for most of the previous century.
India has an advantage over China in that its economic system is more open to private enterprise, unlike China where the government is in direct or indirect control over every business venture. Observers say this makes it harder for China to innovate.
India, by contrast, encourages free market entrepreneurship by private companies who tend to be highly innovative compared with the Chinese government-controlled business model.
The economic data for a post-Brexit Britain is in- and the results are not good. Out of the 19 countries currently in the EU, the United Kingdom was in the bottom 3 in terms of growth. Their growth rate was only 0.1 percent. Compare that to Austria’s GDP growth rate at 0.7 percent or Finland at 1.1 percent. This puts into stark contrast the serious negative repercussions that Brexit has already manifested in the economy of the United Kingdom.
One of the biggest issues facing the United Kingdom is the severe drop in business investment. In the first quarter alone, business investment dropped by .2 percent. Companies are reticent to invest money into the economy due to the fact that the political situation between the UK and the European Union is far from being resolved.
Economists expect that GDP growth relative to European mainland counterparts will remain slow. This is partly due to the major gap between European and British work productivity. Essentially, the UK has far less productivity per worker compared to most of their continental counterparts.
Brexit has ended up being a major headache for politicians on both sides of the English Channel. However, many observers have declared a clear winner in all of this kerfuffle. The European Union seems to have gotten the better side of the deal.
Not only does the United Kingdom expect to retain the benefits of the EU while removing itself from their union- they expect the continent to pay for it. This sadly, does not seem to be possible.