Bond yields are soaring. Stock markets are tanking. The banks are looking wobbly, and money is starting to drain out of Italy. To listen to the mainstream commentary on the Italian crisis part 782, you’d imagine that a wild and irresponsible ‘populist’ government had just been tamed by the financial markets. And that once some sensible suits backed by the IMF and the EU take back control in Rome order would be restored and everything will be back to normal.
The trouble is, that is not quite the whole story. In fact, the markets have already worked out that Italy is leaving the euro, at least in its present form. The debate is about when and how, and whether its departure is orderly or chaotic. And right now the ‘populists’ are winning.
It doesn’t take more than a few minutes with the statistics to work out that the euro has been a disaster for Italy.
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