Briefly, how to think about Italy over the longer-term

In the past year, Italy has been a source of a lot of investor angst, with 10-year yields reaching levels not seen since 2014. Despite the simmering crisis there, I am not concerned about short- or medium-term outcomes because I believe the euro system has more stability than is appreciated. Below I want to outline how I think about Italy and what that will mean regarding the range of potential outcomes economically.
Italy as a paragon of fiscal virtue
Let's look at how the Italians view themselves, first, because I think it's important regarding how the politics will play out. I wrote a post in June on how Italian political figures might say that "at any point in time over the past 25 years, Italy has had a primary surplus (before paying interest) among the highest in Europe". And what th...


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