Financial Support for Poor Families in Italy

FINANCIAL SUPPORT FOR POOR FAMILIES IN ITALY (written by Isabella Ferrari 1 ) I. Family struggles in dealing with mortgage repayments Family finances have assumed an important role in the dynamics of worldwide legislation. The family has to be considered the primary economic unit, the catalyst for national growth and development; it is a source of earnings as well as of debts, strictly depending on its members' incomes and outgoings. The family's assets, especially amongst poor families, are mainly focused on the family home, often conveyanced through the creation of a mortgage. The consequences of the general breakdown recently suffered by the global economy have produced their effects on European families, incapable of avoiding the constant increase of interest rates. II. Sub-prime crisis affects the family’s assets Since July 2007 the stock markets all over the world have suffered a huge crisis, caused mainly by the default of the U.S. sub-prime mortgage system 2 . The most recent studies and publications have made it clear that the current crisis is a sharp consequence of the deregulation policy carried out by the U.S. federal laws in recent years 3 . In fact, the recrimination is that the lack of strict laws controlling the market may have caused its collapse. One of the most important political voices in favor of the interconnection between deregulation and economic default belongs to the newly appointed U.S.A. President, Barack Obama: on October 6, 2008, Barack Obama largely blamed deregulation for the home bubble ingenerated by sub-primes. He therefore stated that a reform is inescapable.