Standort: / Meldung: "Ireland and Italy - ups and downs in Euroland"

Kate Farmer

Cutting to the chase

27. 10. 2011 - 16:15

Ireland and Italy - ups and downs in Euroland

Reality Check: Eurocrisis, NATO in Libya, dangers of weblinks, drought in Tuvalu.

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Agreement on Greece, but more trouble ahead

It took countless summits and seemingly endless meetings and negotiations, but finally the Eurozone has come to an agreement with the banks on the Greek debt crisis. The holders of the Greek debt, which are mostly international and national banks, will halve the value of their Greek bonds, and therefore halve the debt, by issuing new loans as of January. The markets have welcomed the news, but many analysts are saying this is just another "kicking the can down the road" exercise, and is simply buying more time.

But despite the headlines telling us that this deal will solve the Euro crisis - there's still a long way to go. On today's Reality Check, we look at one country still plunging down into the crisis, Italy, and one on its way out, Ireland. The two countries have very different profiles and reasons for their problems.

Germany's Angela Merkl has told Silvio Berlusconi to get his act together and come up with some serious austerity measures to get Italian debt under control. He turned up to the summit in Brussels with a letter promising to sell off public assets, to raise the retirement age and to make it easier for workers to be made reduntant. This didn't go down terribly well in Brussels, but went down even worse in Rome - where a fist fight broke out in the Parliament over the proposals.

Italy has historically had high levels of debt for decades, and it never presented any major problems. This was basically because it had a strong economy, and could cover the costs of the debt easily. Italians are generally thrifty people; they don't have large mortgages or loans, and the level of private borrowing is one of the lowest in the world - so the debt is mostly in the government sector. The government has been squeezed by rising interest rates and falling economic growth, making the long standing debt ever more difficult to cover.

Additionally, Italy has a huge and inefficient burocracy and an aging population, both of which are a major drain on public resources. Our Rome correspondent, Josephine McKenna, says the problem is a highly complex one, and both Italians and Europeans are demanding proper leadership to get them out of it.

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Meanwhile in Ireland, in many respects it seems that the worst is over. The economy is growing again, and exports are up. Their austerity plan appears to have been successful. However, it's worth bearing in mind that the initial problem was a very different one. Ireland had entered the Euro in a massive boom. The economy flourished, and people took on private and business loans and mortgages to keep up with the tide. Then the bubble burst. As in Italy, the economic downturn and high interest rates meant that people could no longer afford their loans - but the big difference was that a great deal of this was private debt - and its on the private level the people have been suffering from the austerity, as Frank McNaulty explained to Joanna Bostock.

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NATO asked to extend Libya mission

NATO had planned to end its mission in Libya on October 31st, but the Libyan Transitional Council have asked them to stay on. The original mandate was to protect civilians, but is that still valid, now that the Gaddafi regime has fallen? Analyst Paul Rogers talks to Steve Crilley about the difficulties and implications of further NATO involvement in Libya.

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The dangers of weblinks

Daniel Sokolov examines the possible risks of posting weblinks on your site if the site you link to contains protected or illegal material.

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The threat to Tuvalu

The south Pacific island of Tuvalu and many of its low lying neighbours are under long term threat from rising water levels, but right now their biggest problem is drought.

Australian climate change expert, Ian Fry, explains the situation to Joanna Bostock.

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