May 22, 2018
Stop me if you’ve heard this one before: A populist government has come to power promising to do things it can’t do if it wants to stay in the euro zone, yet it says it doesn’t want to leave.
That, of course, is what happened in Greece in 2015, and, as proof that the euro crisis never really ends but, rather, takes a break for a while, that is what is happening in Italy right now. The question, then, is whether this brewing confrontation will turn out any differently than the last one, or whether Europe’s threat of financial ruin will be enough to coerce Italy’s radicals into becoming the barely willing executors of policies they despise, as Greece’s radicals did.
So far, at least, the basic outline has been the same in both cases. Italy, like Greece, has cycled through center-left and center-right governments that haven’t been able to get their economy moving again while adhering to the strictures of euro zone policy. Indeed, even accounting for the fact that their working-age populations have both been shrinking, Italy’s economy has barely done better than Greece’s since the euro was first introduced in 1999, and actually hasn’t grown at all since 2004. The reasons for this might be somewhat mysterious — the country’s sclerotic small businesses and the red tape that keeps them from getting bigger might have a lot to do with it — but the results, as you can see below, have not been.
This article was posted: Tuesday, May 22, 2018 at 7:00 am