'EU in Turmoil': Experts Explain What Would Happen If Italy Stops Using Euro

Italy is seemingly incapable of forming a government at the moment. Italian Presdient Sergio Mattarella will attempt to quell the storm by meeting designated president Carlo Cottareli, in order to possibly avert snap elections, although this remains a distinct possibility.

Sputnik spoke with James Newell; Professor of Italian politics at the University Of Salford and Dr Emmanuele Bracco; Lecturer in Economics at Lancaster University to find out more on the topic.

Sputnik: Is there likely to be a snap election in Italy and who would potentially win?

James Newell: The situation is extremely uncertain at the moment and there is a lot of talk about a snap election and that is a distinct possibility. Who’s likely to win it? Again, this is a matter of extreme uncertainty, with a lot of people talking about the possibility of an alliance between the League and the Five Star Movement, which has arisen now because of the standoff between them and the President, who didn’t accept their choice for finance minister.

The whole climate of political debate has been transformed into one of the people versus the establishment, with both populist parties claiming to represent the people, rather than the institutions of the EU.

Emmanuele Bracco: It’s very uncertain right now, but the new election will likely take place in September, as July is a holiday period in Italy and it is very uncommon for elections to take place during this time.

I think the same coalitions will run next time, but the Northern League will win an outright majority, meaning that populists are likely to win overall.

Sputnik: Could Italy stop using the Euro as its currency and what ramifications would this have for the EU?

Emmanuele Bracco: If a populist government is elected this year, there is a good chance that this could happen, but it is not the most likely scenario. If it did happen it would mean a default on the Italian debt and a very difficult economic crisis for Italy and for its neighbours.

It would put the EU in turmoil as this is really uncharted territory, so given the fact that it would have such severe consequences, I can’t see it happening.

James Newell: If Italy stopped using or was forced out of the currency, there would be enormous repercussions. We would see the end of the European project as we currently know it and for those who are in favour of an integrated Europe, it would be a complete disaster.