Italy Stuck In The Doldrums

The economic news from Italy continues to be grim. This week more negative data on consumer confidence and the trade deficit (the biggest since 1992, and it was of course in 1992 that Italy came flying out of EMU).

The ISAE research institute’s consumer confidence index fell to 100.9 in July from 102.9 in June, touching its lowest level in 13 months and underlying the public’s reluctance to make expensive purchases of property or durable goods.

Earlier this week Italy reported it had run a world trade deficit in the first five months of this year of ?6.28bn (?4.4bn, $7.6bn), the biggest imbalance between national exports and imports since 1992.

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About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".

One thought on “Italy Stuck In The Doldrums

  1. I suspect this comment won’t be welcome here but I have to say I’m entirely unsurprised by either the deep malaise of the Italian economy or the other problems across Europe in fact, I WOULD be surprised if the problems weren’t there.

    It’s not that hard to see where the problem is. Had Germany, France, Austria and, maybe, the Benelux countries shared a currency it just might have worked but, when you have as disparate a collection of economies as those constituting the Euro Zone, it’s hardly a shock when it all goes pear-shaped.

    Efforts to buck the effects of currency value movement are as old as currencies themselves but they’ve always failed in the end. Yes, there’s a short term benefit but, as ‘They’ do say, “When push comes to shove” you can’t govern an economy over which you have no fiscal control.

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