One of the major stories that has broken in Italy is Greece’s horrible debt and the plan by the European Union to help. I believe it is important to talk about the effects of the debt because it directly effects the market in all the other EU countries. The debt in Greece has caused the euro to go down significantly, from about 1.60 euro to 1.25 euro per dollar.
Friday, May 7, the Italian cabinet approved a decree to give a significant bailout load to Greece. Their initial contribution will be a little over 5.5 billion euros and another 14.8 billion euros over the next three years. This decree, which takes immediate effect, must be approved by parliament within the next 60 days.
In a statement made by Premier Silvio Berlusconi he made it very clear that “the aim of the Italian government is to work to reach a solution which is common and shared, capable of placing Europe in the best position possible to deal with the crisis”.
Italy is third in contributing to the joint 110-billion-euro bailout package for Greece, falling behind Germany (22.4 billion euros) and France (16.8 billion euros).
Economy Minister Giulio Tremonti stated that Italys contribution will not weigh on the bugit, instead explaining that the loan will increase public debt. Tremonti also stated that “it is our hope that they will agree that it is not enough to respond to this crisis. We need to look forward, learn our lessons and adopt all those measures necessary to ensure things like this one never happens again,” because the financial and economic imbalances threaten “the stability not only of that country but of the whole euro area”.
Video on how some believe Italy is the biggest threat to the Euro.
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