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A research paper by EconPol Europe suggests Italy and the most vulnerable members of the EU’s single currency bloc face being plunged into “quasi-stagnation” as a result of the lockdown measures to curb the spread of the virus. Its authors, Luigi Bonatti and Andrea Fracasso, said ailing economies could become “serious risks of contagion” if they are allowed to fail by decision-makers. They say German Chancellor Angela Merkel’s decision to pave the way for common European debt is only a short-term fix to the financial woes faced by Rome.

Their report states: “The risk that Italy’s fragile financial, economic and political situation, exacerbated by the current crisis, could destabilise the entire Eurozone in the absence of sizeable external assistance was probably one of the main determinants of the German government’s policy shift.

“We argue that, although this shift is sufficient to prevent Italy from plunging into a major financial and political crisis in the short term, thus buying time, it is far from sure that it will be sufficient to drive Italy into a sustainable and satisfactory growth path, so as to avoid that in the longer term it will be in need of further financial support from EU institutions and member states.

“Hence, the latter may again face the dilemma of whether to provide financial assistance to the Eurozone most vulnerable countries, thus making permanent what was supposed to be temporary, or exposing the Eurozone to a possible implosion.”

Italy, the EU’s third-largest economy, is set to receive as much as €209 billion from the bloc’s coronavirus recovery fund.

The scheme was worked up during an acrimonious summit in July, and will see the bloc borrow €750 billion on the international markets to hand out as grants and low-cost loans to pandemic-ravaged regions and industries.

But despite the assistance, bookmakers are still backing Rome to be the next capital to quit the EU.

Without referencing the report, Joe Short, a political betting analyst at Gambling.com, said: “In Italy, discontent with the bloc has been growing since the 2018 general election, during which the populist League and Five Star Movement parties were brought to power.

“The Parties have pushed anti-immigration, euroscepticism and populism as their main policies, but have also been balanced out of the Democratic Party’s left-wing stance.

“And before the coronavirus pandemic took a serious grip on the nation, Italy seemed on a likely course to a referendum on leaving the EU.”

According to the Oddschecker website, Italy are a 3/1 favourite to be the next country to leave the EU.

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They are followed by Greece on 6/1 and France on 8/1.

Regular rule-breakers Hungary and Poland are both 14/1 to be the next country to follow the Britain out of the bloc.

Both France and Italy have seen new anti-Brussels campaigns set up in recent months amid the growing signs of eurosceptism in the countries.

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Charles-Henri Gallois recently set up the Generation Frexit movement, modelling his campaign on Vote Leave’s “Take Back Control” moto.

And in Italy, former Five Star Movement senator Gianluigi Paragone started No Europe for Italy.

His Italexit campaign has been endorsed by Brexit Party Nigel Farage, who posed on social media with one of its T-shirts.

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