S4 Ep25: Italy's economic and political outlook

More than two months after the Italian elections and its
turbulent political negotiations, Italy finally has a new
government. While this has had a calming effect on the financial
markets, Italy's medium and long term economic outlook is yet to
be determined. Bruegel affiliate fellow, Silvia Merler, is
joined by Marcello Minenna, PhD lecturer at the London Graduate
School and Head of Quants at Consob, and Lorenzo
Codogno, LSE visiting professor, to examine the different
ways the country can move forward.


Starting off this Sound of Economics, Silvia examines the new
government's policy priorities and discusses the message of
uncertainty it sends to financial markets and investors. Indeed,
the way in which the government will finance its promises is
still uncertain, thus leaving room for unpredictability. In
the short and medium term, Lorenzo puts forward the proposal that
the new government should tread carefully by introducing
policies gradually in order to maintain fiscal
stability and discipline.


The three guests address the widely discussed topic of
Italy's euroscepticism. Italy's relatively stagnant economic
growth over multiple generations is seen as a key factor in the
country's present-day skepticism towards the single currency.
They agree that, although an 'Italexit' is
an unlikely scenario, it is nonetheless an important
one to consider. Moreover, Marcello points out that Italy's
situation is also a testament to ongoing issues at the
European level, requiring a reform of the eurozone's policies and
a tough look at its current functioning.