- Italy’s Vote Could Spark Fresh Eurozone Financial Crisis, Warns European Central Bank
by LANA CLEMENTS, http://www.express.co.uk/
GROWING populism within the eurozone – and sweeping in from the Atlantic – could have devastating consequences for the bloc’s future, the European Central Bank (ECB) has warned.
Europe’s top monetary policymakers issued a stark alert ahead of Italy’s constitutional referendum on December 4, which threatens another hammer blow to the crumbling European Union (EU).
It’s feared Brexit and the US election of Donald Trump at the start of the month has fuelled anti-Brussels sentiment in the eurozone, which now poses a serious risk to the bloc’s financial stability.
ECB vice-president Vitor Constancio said he is closely watching the outcome of Italy’s vote amid rising concerns the outcome could spark a meltdown worse than last year’s Greek debt crisis. If Italian leader Matteo Renzi loses the vote, it’s thought the anti-euro 5-Star Movement could take over as ruling party – and refuse to pay back the country’s debts.
Mr Constancio said the ECB would react to any “economic shock” from the vote. He said: “It’s the sort of political uncertainty that will trigger or not an economic shock in financial markets. “And depending on the degree of that shock, then we have to see if we have anything to do or not.” The market risk assigned to Italian government debt has shot up in recent weeks.