April 15, 2021

Spain decouples from Italy | Economy

Spain decouples from Italy | Economy

When the bipopulist coalitionto agreed in June to palazzoChigi – the Roman headquarters of the Government – Europe and the markets trembled. The optimists feared "something more than turbulence" (Josep Oliver). The pessimists anticipated an escalation of the risk premium. Goldman Sachs was horrified that he would beat the 250-point mark; it came to overflow the 340 on October 19. Many were watching the storm.

The presentation of the budget drafts to Brussels He prophesied in the fall an exaggerated deficit. Generated by an expenditure on citizen income and construction of infrastructure not compensated, but accompanied, aggravated, by tax rebates. The IMF detected (13/11) "substantial downside risks" of growth, which would leave the transalpine economy in a "very vulnerable situation".

Here, some took advantage of the fact that the Tiber does not pass through Pozuelo to macerate the comparison of both peninsulas.

"We do not want Spain to become a second Italy," Pablo Casado intimated with the Berlin chancellery.

The budget "makes us a little bit more Italy instead of moving away", clarified Alberto Nadal, the Secretary of Economy who would end up moving away, him, from his party.

Rome lost the pulse with Brussels and ended up presenting a deficit for 2019 more passable: 2% of GDP instead of 2.4%.

But the joys last as long as they last. And the end of the year registered a recession, since GDP fell two successive quarters (the last, two tenths, the previous one). While in 2017 it grew by 1.6%.

The laziness of world trade affected the entire eurozone (the most open region). Also to Germany, which narrowly saved the recessive ghost.

And in January, the IMF updated its forecasts for 2019, declining for all (except for Spain, which maintained the forecast of 2.2% of GDP growth). The ugly ducklings would be Germany, which would fall to 1.3% (from 1.5%). And above all Italy, which would touch zero growth this year (0.6%).

Faced with the responsibilities that Chigi Palace externalized outside its borders, the IMF attributed the bad omen (unlike what it did with Berlin) to only internal factors.

Namely, the sovereign risks (of the huge debt, the second of the eurozone after Greece) and the financial (38,000 million of doubtful bank loans not covered by provisions). And to "the connections between the two". He arrived, lends, as a postman who never stops calling twice, the banking crisis Carige.

If the forecasts of the Fund are correct, Spanish growth will triple this year to Italian (2.2 vs 0.6). And if you fine-tune the BBVA with the domestic accounts, it will quadruple it (2.4 vs 0.6). There is no coupling, but decoupling.


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