BoE Governor Carney warns Eurozone after Sunday’s No vote in Italy’s referendum. What is Carney’s statement regarding Italy’s referendum effect?
BoE Governor Carney warns Eurozone
The governor warned that eurozone countries still have to work on ensuring the survival of the single currency. He said that after Sunday’s No vote in Italy’s referendum. Additionally, he said it was incredible that real incomes did not rise in the previous 10 years. Moreover, Mr. Carney said there was a growing sense of isolation and detachment with people who felt left behind by globalization.
Moreover, the Chairman of the G20’s Financial Stability Board said the defeat handed to Matteo Renzi put the euro in danger. He added:
“The risks of a new political instability for economic development, the financial markets and the currency union are increasing further. We meet today during the first lost decade since the 1860s. Over the past decade, real earnings have grown at the slowest rate since the mid-19th century.”
He added that this lack of growth caused inequalities and made people question their future and the benefits of globalisation. Moreover, he said that many people across the advanced world were losing trust in a system that didn’t “raise all boats”. Also, he said that turning their backs on open markets is possible, but if it happens it would be a tragedy.
Italy’s referendum impact on the Euro
Mr. Carney said that the euro is “unfinished business” when he was asked about the Italian vote’s impact on the euro. He has added that there is a variety of measures that should be considered to make the currency durable on the long term.
In the wake of Sunday’s vote the Italian bank stocks fell. Additionally, the Centre for Economics and Business Research said that now the chance of Italy staying in the euro for the next five years has decreased.
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