Thursday, July 19, 2012

Italy Plans Emergency Takeover of Sicily's Regional Government

From the Telegraph:
Monti plans 'Greek-style' takeover of Sicily to avert default
Italian premier Mario Monti is mulling emergency action to take direct control of Sicily’s regional government before the island spirals into a full-blown financial crisis, fearing contagion to the rest of Italy. 
Mr Monti held an “urgent” meeting with the country’s president Giorgio Napolitano on Wednesday to grapple with the constitutional issue after it emerged that the region faces a deficit of up to €7bn (£5.49bn) this year and is in danger of default without sweeping cuts.
Sicily’s regional councillor Andrea Vecchio warned that the island has run out of money. “I’m afraid we will soon no longer be able to pay civil servants’ salaries,” he said.
“The developments in Sicily are very serious,” said Prof Giuseppe Ragusa from Luiss University in Rome. “It is just the sort of negative shock we don’t want right now. Everything has to go perfectly for Italy to pull through.”
The full extent of Sicily’s crisis came to light just before Moody’s downgraded a string of Italian regions, cutting many to levels even lower than Sicily. Piedmont, Abruzzo, Calabria, Lazio, and Campania were all slashed. The City of Naples fell to junk status, plagued by “systemic pressure” from a deep social and economic crisis....MORE 
And from Bloomberg:

Sicily Governor Rebuts Job-Cut Pressure, Saying ‘Go to Hell’