December 12, 2010

Italy And The Euro Crisis

Giulio Tremonti and Mario Draghi
Olli Rehn, EU economic and monetary affairs commissioner, speaking at a press conference in Rome alongside Finance Minister Giulio Tremonti: Italy is “coping well” with the eurozone crisis and its financial position has deteriorated less than others thanks to its prudent fiscal policy and despite high levels of public sector debt. So sorry for the many international and (above all) domestic cassandras writing off the country’s economy—but, if you want to see the glass half empty, it’s also true that, as Rome-based national statistics agency Istat said last Friday, Italy’s industrial production fell 0.1 percent in October after a 2.1 percent drop in September...

Italy’s Central Bank governor, Mario Draghi, in an interview with the Financial Times (article and video): The euro is not in question, and “Europe is moving in the right direction of creating the rules and institutions to address future crisis in a systemic and comprehensive way.” But the large-scale purchases of government bonds could threaten the ECB’s freedom to act without political interference and break European Union rules.