EU growth figures show Italy STAGNANT as concerns grow for Eurozone
ITALY'S economy has stalled as the country's financial crisis threatens to bring down the entire Eurozone.
Italy's economy stalled in the second quarter in a blow to Matteo Renzi's government
Statistics from the EU confirm Italy's economy experienced no growth in the second quarter of 2016, in another blow to Prime Minister Matteo Renzi.
Both Italian statistics agencies and Eurostat confirmed the country's economic recovery ground to a halt in the second quarter, despite economists predicting 0.2% growth.
Rome's economy stagnated between April and June in the lowest quarterly growth figure since emerging from a three-year recession at the beginning of last year.
Seasonally adjusted GDP rose by 0.3% in the euro area and by 0.4% in the EU28 during the second quarter of 2016
The stagnant quarterly growth rate marked a sharp slowdown from the 0.3 percent rate seen between January and March which will disappoint Mr Renzi's government which is aiming for growth of 1.2% over all this year.
France and Finland's economies also shuddered to a halt in the second quarter, with the three nations the only European countries to become stagnant.
In contrast Romania, Hungary, Slovakia, Poland and the Czech Republic recorded the highest growth compared with the previous quarter.
Low growth is a problem for Italy: Economist
Eurostat said in a statement: "Seasonally adjusted GDP rose by 0.3% in the euro area and by 0.4% in the EU28 during the second quarter of 2016, compared with the previous quarter."
The figures come as concerns over the state of Italy's crumbling economy grow and Mr Renzi prepares for a major referendum on constitutional reform.
The timing is bad for the Italian Prime Minister who has threatened to resign if he loses the November vote.
Italy, the eurozone's third-largest economy is looking increasingly close to crisis
Mario Draghi, president of the European Central Bank (ECB), has recently called on politicians to tackle the Italian banking crisis and put in place "growth-friendly" policies.
He said: “The longer we have this in place, the less functioning the banking sector will be - and less effective the banks will be at transmitting our monetary policy.”
Italy, the eurozone's third-largest economy is looking increasingly close to crisis as banks battle to stay afloat amid around £270billion of bad loans.
Monte dei Paschi di Siena received a multi-billion euro bailout earlier this year
European Central Bank President Mario Draghi has called on politicians to tackle Italy's banks
Recent stress tests revealed weaknesses in Italian banks UniCredit and Monte dei Paschi di Siena in the event of a severe economic crash.
But Mr Renzi has repeatedly claimed Italian baks are strong despite overwhelming fears of a crisis.
Last month, the former mayor of Florence, said the multi-billion euro rescue of the country’s oldest lender Monte die Paschi di Siena will show international investors the nation’s bad loan problem is under control.