One of our forecasts for Europe in 2016
- was that Italy would face a crisis brought on by approximately 17% non-performing loans in its banking sector.
- This, however, is not the only issue facing Italy, it is one among many, including unemployment.
This chart just tells a small part of the story. It doesn’t tell you:
- that overall unemployment in four of Italy’s southern provinces is over 18.8%
- and that the rest have unemployment between 12% and 18.7%
- It doesn’t tell you that an Ipsos poll has over 50% of all Italians favoring a referendum on EU membership
- and close to 50% actually saying they would vote to leave.
- It also doesn’t tell you that the Euroskeptic 5 Star Movement party did well in recent local elections
- and is polling well for national elections, which have to be held at some point before the end of May 2018.
These challenges, however, are all intertwined:
- high unemployment has led to disillusionment with establishment parties,
- while non-performing loans have led banks to lend less,
- thus undermining efforts to boost economic growth and job creation.
- The Italian economy is under a great deal of pressure,
- and for many Italians, especially those who are young and living in the south, the situation is bordering on catastrophic
- and the EU’s promise of prosperity is falling on deaf ears
To understand why there is so much disillusionment in a country like Italy, this chart is a good place to start.