The Italian Inposition. The reason the ECB won't raise rates is because the Italian government is so indebted that they'd have to default if interest rates went up, which would tank the Euro and crash every other European economy.
I'm not really blaming the Italians for the EU's predicament. This is ultimately the problem with having an international currency. The EU nominally has policies in place to guard against this kind of thing by preventing its member states from borrowing so much, or from adopting the kind of debt structure that the Italian government has done.
The problem is that the EU's commitment to expansion for the sake of expansion means they keep ignoring their own rules in order to accommodate economies like Greece, which should never have been allowed to join, and Italy, which joined and then spent 20 years breaking the rules.
So now the ECB is in a situation, caused by their own shitty policies and Brussels' refusal to enforce some of the only good economic policies they had, where they're fucked no matter what they do. Keeping interest rates low will cause inflation to spin even more out of control, but raising them will create a domino effect of debt defaults, starting with Italy, then countries like Greece and Portugal or even Spain.
Either way, the Euro's value collapses, and Europe's supply chain crisis gets even worse because of the sheer amount they'll have to spend on imports. They could alleviate some of that by trying to stimulate local production rather than doing the opposite (see: the Netherlands and Ireland), but even if they did, Europe can't produce enough food to feed its population.
The Italian Inposition. The reason the ECB won't raise rates is because the Italian government is so indebted that they'd have to default if interest rates went up, which would tank the Euro and crash every other European economy.
Just globalism things.
I'm not really blaming the Italians for the EU's predicament. This is ultimately the problem with having an international currency. The EU nominally has policies in place to guard against this kind of thing by preventing its member states from borrowing so much, or from adopting the kind of debt structure that the Italian government has done.
The problem is that the EU's commitment to expansion for the sake of expansion means they keep ignoring their own rules in order to accommodate economies like Greece, which should never have been allowed to join, and Italy, which joined and then spent 20 years breaking the rules.
So now the ECB is in a situation, caused by their own shitty policies and Brussels' refusal to enforce some of the only good economic policies they had, where they're fucked no matter what they do. Keeping interest rates low will cause inflation to spin even more out of control, but raising them will create a domino effect of debt defaults, starting with Italy, then countries like Greece and Portugal or even Spain.
Either way, the Euro's value collapses, and Europe's supply chain crisis gets even worse because of the sheer amount they'll have to spend on imports. They could alleviate some of that by trying to stimulate local production rather than doing the opposite (see: the Netherlands and Ireland), but even if they did, Europe can't produce enough food to feed its population.
Things will get wild in diverse Western Europe cities if the inflation crisis crashes the wellfare system.
It's both, really. No one gives a fuck if Greece craters but the people who own villas there, but the large economies of Spain and Italy...