Global markets slumped on Monday over fears that Italy's debt crisis is worsening as the country's 54-billion-euro austerity package goes before the lower house of parliament for final debate.
The proposal includes changes to pensions, government spending cuts and a special levy on the rich.As Italy's debt crisis worsens, other members of the eurozone are debating what measures can be taken to tackle the issue. Johan Van Overtveldt, editor-in-chief of Belgium’s leading business magazine, told RT about Germany’s reaction to recent downturns. “The Greek economy is in an outright depression now: its GDP is shrinking from seven to eight per cent on the annual basis, unemployment is close to 25 per cent, its budget situation is out of control,” said Van Overtveldt. “And there is a lot of disagreement in Germany on how to deal with the crisis.”The worries within Germany’s financial world also follow last week’s resignation of the Central Bank's chief economist who was for the first time succeeded, not by somebody the Bundesbank, but by a financial diplomat. “We’re certainly amidst very rough waters, it is now very clear that Bundesbank, Germany’s Central Bank, is opposing the policies of the European Bank, especially buying the bonds of countries in trouble, like Greece, Spain, Italy,” Van Overtveldt told RT. “On the other hand, we see Chancellor Merkel arguing that the euro will be saved and that Germany will stay in the eurozone. But this is an increasingly isolated voice in Germany. The public opinion and the Bundesbank are against the euro.” Van Overtveldt sees this as a sign of clear structural problems within Eurozone.“The major problem is that we don’t have a political union,” he told RT. “There are no conversions in economic policies. Of course, you can’t create a political union overnight, but this is more-or-less what markets are expecting at the moment. Either we take a big leap or we will have major troubles one coming after another.”