Without an agreement at this week's European summit there are serious risks of contagion for Italy and Spain. This was stated by the chief economist and deputy secretary general of the OECD Piercarlo Padoan in a live interview with “L'economia in Tasca – Gr Rai. “Yes, there are elements of generalized weakness that can translate into contagion phenomena – he said – There would certainly be tensions on the financial markets of these two countries, which however should not be identified in a common block, the problems of Spain and Italy are different, and therefore there would be a need for intervention tools”.
According to Padoan, “the resources to intervene, the firepower of the saved funds and the ECB are there, the tools to intervene are there, even the new IMF resources decided by the G20 are there: in short, the ammunition is there, it is a question of putting them in order, of building an intervention strategy, but there must be a strong political signal. So far there have been no definitive answers and this game has sometimes been played deliberately by some countries; I have the feeling that the more it goes on, the more risky and dangerous this game becomes”.
However, he added, “I won't venture on forecasts, but I note that in the last two years, i.e. since the Greek crisis triggered this situation, there have been many summits defined as 'decisive' which didn't turn out like this: the markets first they reacted well and then proved to be disappointed, and a similar situation cannot be ruled out. Again – he continued – there is a paradox: Europe is going in the right direction, steps forward have been made, but this speed of progress is always lower than the speed of the markets, for once we need to take a leap forward, we need to find a high political compromise”.
