Ashoka Mody, Columnist

Italy’s Budget Isn’t as Crazy as It Seems

EU officials must recognize that the country needs stimulus.

October 26, 2018 at 6:00 AM UTC

Ashoka Mody is a visiting professor in international economic policy at Princeton University. Previously, he was a deputy director at the International Monetary Fund's research and European departments. He is the author of "EuroTragedy: A Drama in Nine Acts."

Don’t be so negative.
Photographer: Frederick Florin/AFP/Getty Images

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Europe’s leaders have come down hard on Italy for its plans to increase spending with the aim of boosting growth and helping the poor. What they fail to recognize is that a little stimulus might be just what the Italian economy needs.

The outlook for the global economy is deteriorating more rapidly than forecasters realize. A slowdown in China has hit global trade, European exports are decelerating, and euro-area business sentiment is sharply down. All this can’t help but affect Italy, where industrial production is barely increasing and a recession may be imminent.