While the world continues to speak about Brexit and its impacts to the world, experts have cited that another event in Europe may shake up the balance of the world should it continues to remain unresolved.
Italy is currently experiencing a very difficult banking crisis as the country's lenders are now succumbing from the impacts of bad loans amounting to 360 billion euros. Experts said that this crisis may likely present a more greater threat for the stability of the eurozone in comparison to the Brexit's impact.
If Italy's financial system is to recover, it needs a substantial bailout that would assist the country to handle the crisis. However, the current "bail-in" laws of the EU is preventing Italian Prime Minister Matteo Renzi from launching a bailout without affecting the banks' shareholders and bondholders. Renzi is very desperate to avoid this because this may affect his political career as at least thousands of households and individuals have bought bonds and if he presses the issue, Renzi will lose the support of the people.
The Italian prime minister has also argued that the EU bail in rules released after the financial crisis should be waved because of the impact of Brexit to the market and its underlying impact in Italy's financial stability.
However, the EU continues to refuse this request and some sources said that Renzi may request a 40 billion pound bailout. Should he do this, it may be like throwing the Eurozone project at a standstill because this would question its stability. Other countries experiencing financial crisis like Portugal may also see this as a way to seek bailouts and ultimately undermine the EU's credibility in stopping financial crisis.
