For the last three weeks, Italians have been lining up to put their money into Swiss bank accounts as fears grow for the safety of their assets under the government’s proposed ‘people’s budget'.
Some are having to wait weeks to open an account. It’s becoming difficult for banks in Swiss cities to find appointments for their would-be Italian clients to open an account as a non-resident, according to a financial advisor at the Raiffeisen Institute. “We’re overburdened,” he told Repubblica.
Spooked by the EU’s stern warnings of potential economic crisis, downgrades by ratings agencies and a growth slowdown, scores of well-off Italians have crossed the border to find out if they can open an account in Switzerland.
Minister Paolo Savona, after all, is one of many of Italy’s ministers who takes part of his hard-earned money for security here in the Confederation, Repubblica writes.
Meanwhile, Italy's finance ministry today rejected a grim economic forecast by the European Commission, describing it as a “technical failure.”
The European Commission predicted in today's report that Italy’s deficit would balloon due to a spending boost planned by Rome's populist government that blatantly defies EU rules on expenditure.
The EU said in its report today that growth in the eurozone would slow in 2019 and beyond, citing global uncertainty and heightened trade tensions.
“We regret to note the Commission's technical failure,” Giovanni Tria said in a statement, slamming “an inadequate and partial analysis” of the populist government's proposed 2019 budget.
According to Brussels, Italy's deficit will reach 2.9 percent of its gross domestic product next year, much bigger than the 1.7 percent in its previous forecast.
Crucially, the EU believes Italy will only grow by a mere 1.2 percent in 2019 – while Rome's 2019 budget is based on an estimate of annual growth of 1.5 percent.
In its Thursday forecast, the Commission said it believed that continued overspending means Italy's massive debt will remain unchanged at around 131 percent of GDP over the next two years.
But Italian leaders insist a high debt and low growth rate are all the more reason to kickstart the economy through a spending spree.
Prime Minister Giuseppe Conte insisted that Italy's debt would be reduced to 130 percent of GDP next year and to 126.7 percent in 2021.
The Commission “underestimates the positive impact of our budget and our structural reforms,” Conte said in a statement.
“Let's move forward with our estimates… there are no grounds for questioning the validity and sustainability of our forecasts,” Conte said.
Any other scenario is “absolutely unlikely” said Conte.
The Italian government said that, while the Commission's forecast was in “sharp contrast” to its own, it still wanted “constructive dialogue”.
Fears of an economic slowdown in Europe have risen as markets fret over the possibility of a no-deal Brexit and trade tremors sparked by US President Donald Trump's protectionist policies.