Italy MUST act NOW: IMF’s URGENT warning to EU as Italian debt hits ‘ALARMING’ levels
ITALY is in URGENT need of intervention in order to recover as the eurozone’s third biggest economy crumbles in the aftermath of post-Brexit, the International Monetary Fund has warned.
By REBECCA PERRING
Express.co.uk
Thu, Jul 21, 2016
The financial watchdogs described the nation’s fiscal debt as “alarming” and warned structural problems must be addressed “urgently” as it unveiled the fragile state of Italian banks.
Italy is on the brink of financial and political meltdown and leader Matteo Renzi may be abut to push t over the edge by calling a referendum on constitutional reform in October, potentially plunging the already beleaguered European Union into fresh chaos.
Juan Toro of the International Monetary Fund (Fmi), said: “It is necessary to take significant measures in the recovery of credit.”
The country’s biggest challenge is the evasion of VAT, which peaks to around 30 per cent over 2 to 3 years.
The IMF said “recovering old credit is very difficult” because tax is collected on a annual basis rather than the normal collection of VAT on a monthly basis, which creates a “subdivision and the duplication of revisions and inquiries”.
The crisis comes as Italy’s bank shares plunged on Tuesday, showing signs they are suffocating under a pile of unservicable loans and a growing sense of political instability.
This could push Italy back into recession and, in a doomsday scenario, generate a Greek-type meltdown that Europe would find almost impossible to contain.
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