Italy

Economics

The ECB’s Italian Job

“We trust that the government will take all the appropriate actions” – Jean-Claude Trichet. Mario Draghi. That was the sign-off for the now infamous ECB letter sent to Silvio Berlusconi’s government during the height of the European sovereign debt crisis. Nearly seven years on, Italy has once again experienced financial market turmoil and the ECB this week will no doubt be asked many questions about the situation.

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Macrobites

Italy: too big to fail, too big to bail

 

Political risk is back with a vengeance in Italy. As the third largest global issuer of government bonds after the US and Japan, the country is too big to be allowed to fail without severe contagion to the global financial system. However, it is also too big to bail out comfortably using tried and tested mechanisms.

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Strategy

Five Star Radio

The new political paradigm has thrown up another populist government in Italy, threatening the European project. Meanwhile in the US, could "Operation Twist Again" come into play as investors stress about ever-flatter yield curves?

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Strategy

All roads lead to Rome

With the country saddled with high debt and unstable politics, Italian debt markets have persistently underperformed European averages for the last couple of years. This pessimistic narrative is definitely seductive but we believe it is dangerous to get sucked into an excessively negative outlook. The debt problems are chronic rather than acute, the politics are not obviously more unstable than usual, the ECB is being flexible with asset purchases, and the return potential could be greater than it first appears.

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Macrobites

Pizza, piazzas and political turmoil?

I’ve had Italy in my sights for a long time. Beautiful lakes, stunning food…and oh, some potential political turmoil. So before I go off to enjoy the delights of Lake Garda, I’ll impart my latest thoughts on political developments in Italy.

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Economics

Lies, damned lies and youth unemployment statistics

It has been a very popular narrative in the run-up to the referendum to suggest that the euro zone economy is failing a generation of job-seekers. However, it would appear that this 'conventional wisdom' doesn't stand up to a close inspection of the facts.

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