Italy is on the brink of financial and political meltdown and leader Matteo Renzi may be abut to push t over the edge by calling a referendum on constitutional reform in October, potentially plunging the already beleaguered European Union into fresh chaos.
Juan Toro of the International Monetary Fund (Fmi), said: “It is necessary to take significant measures in the recovery of credit.”
The country’s biggest challenge is the evasion of VAT, which peaks to around 30 per cent over 2 to 3 years.
The IMF said “recovering old credit is very difficult” because tax is collected on a annual basis rather than the normal collection of VAT on a monthly basis, which creates a “subdivision and the duplication of revisions and inquiries”.
The crisis comes as Italy’s bank shares plunged on Tuesday, showing signs they are suffocating under a pile of unservicable loans and a growing sense of political instability.
This could push Italy back into recession and, in a doomsday scenario, generate a Greek-type meltdown that Europe would find almost impossible to contain.
Full article: Italy MUST act NOW: IMF’s URGENT warning to EU as Italian debt hits ‘ALARMING’ levels (Express)