Do we have Mario Monti or Mario Draghi to thank for the lower spread? Can we keep on living happily ever after with a 300-point differential over the German Bund? Is our European and euro membership an advantage or a disadvantage? Coming up with a few timely answers to these questions that have been spicing up the political debate in Italy.
Firstly, let us state unequivocally that Monti’s Italy certainly did its homework. At least that’s something we can all agree on. Since Christmas of 2011, our country has implemented bold consolidation actions on its public accounts and long-term structural
reforms, with pension reform receiving the most approval. These measures have enabled Italy to hold its current expenditure in check, and actually post a primary surplus for 2012 of 2.3% of GDP (compared to Germany’s 1.1%, and France and Great Britain’s respective primary deficits of -2.1% and -5.1%).