Italy’s Slow-Motion Euro Train Wreck
— June 1, 2018
By Nouriel Roubini and Brunello Rosa
Even before Italy’s March election, in which the populist Five Star Movement (M5S) and the right-wing League party captured a combined parliamentary majority, we warned that the market was being too complacent toward the country. Italy now finds itself in more than just a one-off political crisis. It must confront its core national dilemma: whether to remain shackled by the euro or try to reclaim economic, political, and institutional sovereignty.
We suspect that Italy will compromise and remain in the eurozone in the short run, if only to avoid the damage a full-scale rupture would cause. In the long run, however, the country could increasingly be tempted to abandon the single currency.
Read the full article as published in Project Syndicate.
Nouriel Roubini is a Professor of Economics and International Business and the Robert Stansky Research Faculty Fellow.