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Why the most significant macroeconomic risk is not the upcoming recession, but the collapse of the Euro and the European Union

April 27, 2020

Ten years after the credit crisis, the European Union demonstrates that it has learned very little on how to unite and decisively take pan-EU measures to tackle crisis and support recovery. A series of long negotiations between the major economies of the South versus the North, with the European Central Bank (ECB) awkwardly stuck in the middle, not only doesn’t address the sustainability of the European economy as a total, but it feeds, as in the last crisis, the speculative appetite of the markets towards sovereign debt of the weaker links. However, this time, EU is not called to bail out a small economy like Greece, but Italy and Spain, its 3rd and 4th largest economies, accounting for approximately EUR 3.5 trillion of its Gross Domestic Product.

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