, Columnist
Italy’s Extraordinary Act of Self-Harm
The great escape from Italian assets is bound to get worse.
Italy’s creditworthiness is now tied explicitly to its populist rulers.
Photographer: Giulio Napolitano/BloombergThis article is for subscribers only.
Let there be no doubt, the budget that the Italian government is about to pass is a remarkable act of economic self-harm. It could take a long time to repair.
The measures, outlined on Thursday night, defy the rules of prudent debt management in order to fund outlays that will do little to improve Italy’s competitiveness. Most important, they tell investors that the populists have the upper hand in government. Italy’s creditworthiness is now that of its ruling parties: the League and the Five Star Movement.