It may take a further rise in Italian bond yields to remind the populist government’s leaders in Rome that their room for maneuver to operate with more debt is very limited.
What lessons does the revival of Fiat hold for all of Italy?
The EU does not always need more members and deeper integration. Less could be more in the end.
If Italy’s government tames its radical instincts it could be allowed to get away with a few things. But if it is confrontational with the EU it will be heading for trouble.
The EU no longer lives in the orderly world of the Maastricht treaties, but in the world of a “populist monetary union.”
The new Italian government seems keen to play blame games – and pursuing economic solutions that have already failed conclusively in the past.
If a radical government in Rome plunges Italy into a deep crisis, it would still be an Italian crisis — rather than a “euro“ crisis.
A controlled unwinding of the euro might offer material economic benefits to many members of the Eurozone.
The saga of a dynamic Germany and a sclerotic Italy does not reflect the historical record.