EUROZONE: Merkron’s main risk is the interregnum (Italian politics in H2)

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The Franco-German proposal for a budget-based recovery instrument is a promising first step, but significant political challenges still loom in H2/2020.A unique constellation of factors has motivated Berlin to move, but among the many open questions are reform commitments and repayment modalities.The main risk is that Italy’s potential need for immediate support sees the debate about the initiative get mixed up with more traditional fights over “conditionality.” Although nobody in Berlin would want to call it like this, the Franco-German proposal effectively envisages the Commiss
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