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Deutsche Bank: Italy ‘is a crisis waiting to happen’ Germans send Rome shock threat

ITALY is on the brink of triggering the “next financial crisis” as the weakest link in Europe in a move that threatens to bring the eurozone down, strategists from a top German bank have warned.

The Mediterranean country is already engulfed by a £310billion (€349billion) debt mountain that banks accumulated during a three-year recession.And today Deutsche Bank’s strategists warned of more political and economic uncertainty from the eurozone‘s third largest economy,

They said: ”A country nearing an election and with high populist party support, with a generationally underperforming economy, a comparatively huge debt burden.

“And a fragile banking system which continues to have to deal with legacy toxic debt holdings ticks a number of boxes to us for the ingredients of a potential next financial crisis.”

Italy financial crisis GETTY

Italy could be on the brink of a financial crisis


Deutsche BankGETTY

Deutsche Bank issued a warning over Italy


A fragile banking system which continues to have to deal with legacy toxic debt holdings ticks a number of boxes to us for the ingredients of a potential next financial crisis

Deutsche Bank

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.The warnings echoed earlier concerns Italy’s series of economic and political crises could blow up to rip apart the eurozone, as disastrous Greece almost did last year.

Aside from its banking troubles, Romes already feeble economic outlook has also been hurt by the fallout from Britain’s momentous vote to leave the European Union (EU).

The German bank also identified 10 other issues that could cause disaster between now and 2020 in their annual study entitled ‘The Next Financial Crisis’.

Italy’s populist party Five Star Movement is gathering momentum as the latest opinion polls showed it neck-and-neck with the ruling Democratic Party.Deutsche Bank strategists Jim Reid, Nick Burns, Sukanto Chanda and Craig Nicol warned there are “a number of areas of the global financial system that look at extreme levels.”

They said: “This includes valuations in many asset classes, the incredibly unique size of central bank balance sheets, debt levels, multi-century all-time lows in interest rates and even the level of potentially game changing populist political support around the globe.

“If there is a crisis relatively soon, within the next 2-3 years, it would be hard to look at these variables and say that there was no way of spotting them.”

eurozone GETTY

Italy threatens to rip apart the eurozone


“If there is a crisis relatively soon, within the next 2-3 years, it would be hard to look at these variables and say that there was no way of spotting them.”
http://www.express.co.uk/news/world/856050/Italy-financial-crisis-economy-eurozone-eu-latest-news-Deutsche-bank

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