Both Italy and Spain, two EU member countries with both problems in dealing with the consequences (social and economic) of the Covid-19 pandemic (the number of deaths proportionally to their population )are very high while the fall in GDP for 2020 in both member countries is expected to be double digits.
by Thanos S. Chonthrogiannis
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Both Italy and Spain share common characteristics that create problems by not allowing their governments to overcome the problems caused by the Covid-19 pandemic. In more detail:
- Economies and the composition of their GDP depend to a considerable extent on the services sector.
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- Their governments are coalition governments of heterogeneous parties with no party having self-reliance, making it difficult for politically difficult bills and even the annual state budget to pass in Parliament.
- Since their governments are made up of heterogeneous parties with different approaches to tackling the pandemic, they are creating a mound to implement necessary reforms to get out of the recession.
- Local authorities, since they belong to a non-governmental party, further step up the obstacles to the incorrect implementation of the necessary measures.
- Both member countries have entered the path of non-refundable over-indebtedness.
The increase in public debt, while failing to implement economic reforms, forced Italian Deputy Prime Minister Ricardo Fracaro to call for the ECB to write off all loans given to Italy in the form of Italian bond issues.
Both member countries face the spectre of years of economic stagnation. The difficulties lie ahead for the governments of the two member countries.
