Lorenzo Codogno

Italexit is not a solution for Italy’s problems

Beppe Grillo’s Five Star Movement riding high in the polls in Italy has led to speculation over the prospect of the country leaving the euro. Lorenzo Codogno and Giampaolo Galli argue that an ‘Italexit’ would be a catastrophic scenario, with incommensurable economic, social, and political costs lasting for many years. They note that redenomination, and a likely default on debt […]

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    Is Italy’s recent support to its banks the start of a new wave of public intervention in the EU?

Is Italy’s recent support to its banks the start of a new wave of public intervention in the EU?

The banking crisis in Europe has three distinct legs according to Lorenzo Codogno and Mara Monti. The first leg was purely financial contagion from the sub-prime crisis in the US to toxic assets held in bank portfolios in Europe, while the second wave was equally intense, amid the negative feedback loop between banks and sovereigns. The third wave is […]

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    Italy’s referendum: Renzi’s big gamble failed. What’s next?

Italy’s referendum: Renzi’s big gamble failed. What’s next?

Following the outcome of today’s referendum, President Mattarella will do his best to avoid early elections. Any new caretaker government would easily take a full year to deliver a new electoral law and thus the baseline case remains for elections no earlier than the natural end of this parliamentary term in spring 2018, writes Lorenzo Codogno. The tail risks […]

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    Italy’s referendum: Renzi’s gamble failed, so what’s next?

Italy’s referendum: Renzi’s gamble failed, so what’s next?

Following the outcome of Sunday’s referendum, Italy’s President, Sergio Mattarella, will do his best to avoid early elections. Any new caretaker government would easily take a full year to deliver a new electoral law and thus the baseline case remains for elections no earlier than the natural end of this parliamentary term in spring 2018, writes Lorenzo Codogno. He […]

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Watch Italy’s referendum for potential banking problems

Italy’s constitutional referendum is fast approaching and financial markets are already jittery. Lorenzo Codogno and Mara Monti write that while some observers have pointed to the risk of the Five Star Movement getting into power, or even Italy leaving the euro, these are unlikely developments, at least in the short term. The real issue is not about political instability, […]

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    Italy’s constitutional referendum: Mapping the possible political scenarios

Italy’s constitutional referendum: Mapping the possible political scenarios

Italy’s prime minister, Matteo Renzi, has stated that he will resign if he loses a referendum on constitutional reform scheduled to take place before the end of the year. Lorenzo Codogno writes that although the referendum will have major implications for the Italian government and the next general election, concerns about the wider impact on Italy’s political and financial […]

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    Italy’s earthquake: estimating the economic and financial damage

Italy’s earthquake: estimating the economic and financial damage

The human cost of the earthquake which hit Italy on 24 August was disastrous, with nearly 300 people killed and almost 400 injured. But the earthquake will also have both a short and long-term economic impact on the country. Lorenzo Codogno attempts to estimate the size of this impact, noting that the nature of the economic damage, the lack […]

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You can’t get it all: Italy’s public finances

The Italian government will present its public finance projections by 10 April. Lorenzo Codogno writes that fiscal policy is expected to be strongly expansionary in 2016, but courtesy of flexibility clauses, the government will likely avoid entering into the EU’s so called ‘Excessive Deficit Procedure’ in May. He argues however that a fiscal problem looms large in 2017, while […]

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Greece: a bumpy road to salvation

Negotiations for the completion of the first review of the third bailout programme for Greece are approaching a critical stage, with the Greek government resisting some pension and tax changes, while creditors insist on credible and rigorous implementation. Lorenzo Codogno writes that differences are bridgeable within a couple of months, and a positive outcome would open the door for […]

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    Italy is stretching budget flexibility to the limit, raising a number of issues over EU fiscal rules

Italy is stretching budget flexibility to the limit, raising a number of issues over EU fiscal rules

Italy is currently asking Brussels for more flexibility over its new budget for structural reforms, investments and to help manage the refugee crisis. Lorenzo Codogno writes that this makes the Italian budget expansionary and, perhaps, also pro-cyclical. Moreover, it raises a number of issues on the proper interpretation of EU fiscal rules, the rules themselves, and the most appropriate […]

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    Grexit remains unlikely, but time is against the Greek government

Grexit remains unlikely, but time is against the Greek government

Eurozone finance ministers met on Tuesday to discuss the Greek debt crisis following the country’s ‘No’ vote in its bailout referendum on 5 July. Lorenzo Codogno writes that while a Grexit remains unlikely, the risks have clearly increased since the referendum and the financial and economic situation in Greece may further deteriorate before a solution is in sight.

Following the […]

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Experts react: Greek referendum

The final result of the Greek referendum saw 61.3 per cent of voters reject the proposal, with 38.7 per cent voting in favour. We asked some of EUROPP’s contributors for their reactions to the result and what it could mean for Greece’s future in the Eurozone.

Kyriakos Moumoutzis: “To ‘live life on their own terms’ is to live life outside […]

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    Both Greece and its creditors must compromise to prevent the risk of a Grexit

Both Greece and its creditors must compromise to prevent the risk of a Grexit

Greece and its creditors have been engaged in a two-month standoff over the release of further financial assistance to the country. Lorenzo Codogno and Paul De Grauwe write that with no agreement yet reached, the possibility of Greece leaving the euro has now become real. They argue that the only solution to the crisis is for both sides to […]

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    Why Denmark should either abandon its peg to the euro or join the single currency

Why Denmark should either abandon its peg to the euro or join the single currency

Following Switzerland’s announcement in January that it would no longer hold the Swiss franc at a fixed exchange rate with the euro, Denmark has faced mounting speculation that it will follow suit and abandon its euro peg. Lorenzo Codogno and Paul De Grauwe write that there is a paradox in the approach of Denmark to the issue: the Danish […]

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