Wednesday, August 1, 2012

Will Italy's default start with Sicily?

Sicily’s regional president, Raffaele Lombardo, resigned yesterday. He is under investigation for Mafia ties, but Sicily has recently been hit by another scandal: the region is at risk of defaulting on its debts.  There must be a reason if they call it “the Greece of Italy”. The rumour is spreading all over the world; even The New York Times wrote a big article about it.
Sicily is currently governed by the Movement for Autonomy, a party which wishes Sicily seceded from Italy. Honestly, I have no idea how Sicily could survive on its own, since it is already having trouble as it is. Sicily is already an autonomous region, and as such it has almost full control of its tax revenue. Whether they use it properly or not, that’s the question.  It seems that Italy doesn’t want to let go of Sicily simply because many parties need the votes of Sicilian people to survive.
Meanwhile, PM Mario Monti is sending 400 million euros to solve Sicily’s liquidity problems.
Among all the good news we hear recently, the thought of Sicily defaulting isn’t really reassuring. As Italy is at risk of defaulting as well, let’s hope that Sicily won’t start a chain reaction that will turn the whole country into another Greece.