the threat he poses to the euro was again made clear this week when he pitched his country’s public finances into further chaos, leaving a hole of at least €4 billion-5 billion ($5.8 billion-7.2 billion) in the latest of two emergency budgets designed to get his country out of the fix in which it has been trapped for the past two months. Two things now stand between Italy and a debt crisis vastly more menacing to the single currency than any so far on the euro-zone periphery: support for Italy’s bonds from the European Central Bank (which has bought some €30 billion-worth since mid-August), and a €45.5 billion deficit-reduction plan that the ECB demanded in return for its help. When this was unveiled by Mr Berlusconi on August 12th, investors might have been forgiven for thinking that—bar the odd amendment —the same plan would be set before parliament. But in Italy nothing is safe from modification, and on August 29th Mr Berlusconi unpicked his package, throwing out the measure he most disliked, a surtax on top incomes in the private sector. (...)
The public outcry looks likely to force Mr Berlusconi into a U-turn that would enlarge still further the hole in his former austerity package. That alone is enough to cast doubt on the ECB’s readiness to continue buying Italian debt. But there is another factor. As the price of intervention, the bank’s president, Jean-Claude Trichet, and his successor-designate, Mario Draghi, reportedly required not only the pushing through of the package that Mr Berlusconi has just undone, but also a comprehensive programme of privatisation and liberalisation. And, of that, there has never been more than a trace in the government’s plans.
Il WSJ di oggi dedica all'Italia un commento appena meno allarmato, che si conclude con un appello per un rilancio della crescita:
Austerity, combined with the European Central Bank's sovereign-bond buys, might buy Italy enough time to pay its bills for the next two years. But the country won't permanently exit the bond-market hit-list until it liberates Italians to do again what once put them at the center of the commercial universe: invest, innovate and thrive. Ignazio Visco, the deputy director-general at the Italian central bank, warned as much on Tuesday when he told a Senate committee that too much austerity with too few pro-growth reforms would "risk a phase of stagnation." He's right on principle, though the sooner Italians realize that their stagnation is more than a "phase," the better.
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