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In RealTime posts, PIIE senior staff and colleagues discuss the fast-moving economic news, financial developments, and public policy choices confronting the United States and the world.
A little noticed fact about the economic turmoil in southern Europe is that Portugal and Italy, two of the countries struggling the most, had minimal growth even during the seven good pre-crisis years of 2001–07.1 The most overlooked common problem of the four Southern European countries—Portugal, Spain, Italy, and Greece—is that they are all hampered [...]
Installation of a new government in Italy and the first effects of the newly approved bailout in Cyprus provide some modestly optimistic data points for an otherwise weak euro area outlook. For Italy, a Fresh Start, a Youthful Team, but No Guarantees of Success In Italy, Enrico Letta has taken office as the prime minister, [...]
The recent election and political confusion in Italy indicate that political risk is back in Europe. Yet what is the real scope of the danger, and where do we go from here? To answer, it is worth noting that there were two elections in Europe, one in Cyprus and one in Italy, and in many [...]
It is no surprise that the results of the Italian political election have unsettled the markets and stirred fears outside the country about the potentially damaging impact on Europe, the United States, and the global economy. The markets appear to be mostly concerned by the absence of a working majority in the parliament, increasing the [...]
The announcement by Italy’s technocrat prime minister, Mario Monti, of his intention to resign after parliament’s approval of the 2013 budget law came as a surprise for most observers. Premier Monti attributed his decision to the withdrawal of crucial support by PDL (People of Freedom Party), which had supported his technocrat government for the past [...]
Several people have asked me in recent days about my assertion that a Spanish government and indeed the euro area as a whole would benefit from seeking a lending lifeline from European authorities, including the European Stability Mechanism/European Financial Stability Facility (ESM/EFSF) and the European Central Bank’s new Outright Monetary Transactions (OMT) facility. Arguments opposed [...]
The unscripted comments on July 26 by Mario Draghi, beleaguered president of the European Central Bank (ECB), will be remembered as one of the more effective cases of verbal market intervention in recent history. Spanish two-year yields dropped from record levels of around 6.5 percent then to 3.5 percent, and Italian two-year yields likewise are [...]
European Union leaders had the umpteenth euro crisis summit at the end of January. Indeed the EU Council meets so often that the descriptions of these gatherings should be changed from “yet another summit” to “back in session.” The slide to near-permanent policymaking has occurred as the EU Council begins to resemble a sitting parliament. [...]
Since December, Premier Mario Monti of Italy has taken several steps that appear to have improved market confidence in the country’s ability to repay its debt, thereby raising hopes that Italy can recover from its financial and economic crisis. Parliamentary approval of an additional public finance adjustment package for 2012–14 in December (the third [...]
If one is to judge by the Italian public finance data released on December 10 by the National Institute for Statistics (ISTAT), Italy is on the path to adjustment. In the third quarter of 2011 the general government net borrowing has been 2.7 percent of GDP, down from 3.5 percent in the corresponding quarter of [...]