Courtesy of Mish.
Analysis of what’s happening and what to do about problems are two different things.
Financial Times writer Wolfgang Münchau provides an excellent example in Italy Debt Burden is a Problem For Us All.
Münchau’s opening gambit is “We need extreme and co-ordinated policy to make it possible for Italy to ultimately stay in the eurozone.”
Münchau states, “I think it is high time to address the consequences of failure with more clarity than is usually done. Put bluntly, Italy’s economic position is unsustainable and will result in eventual debt default unless there is a sudden and durable change in economic growth. At that point, Italy’s future in the eurozone would also be in doubt – and indeed the future of the euro itself.“
High Time For Honest Assessment
Actually, it is indeed “high time” for something. What we need is an honest assessment from political leaders and euro puppets that the euro is doomed.
The flaws of the euro are well understood. I am 100% certain that Münchau could write a playbook on them with ease.
Münchau even admits that it would be “naive” to believe economic reforms can save Italy.
“The economic adjustment needed goes much beyond a few structural reforms. Italy needs changes in the legal system, it needs to bring taxes down to the eurozone average, and to improve the quality and efficiency of the public sector. It needs, in other words, to change the entire political system. Even that may not be enough.”
According to Münchau (and I wholeheartedly agree), Italy needs economic reform, a new legal system, lower taxes, less government spending, pension reform, and more productivity. And even that might not be enough!
Nonetheless, to support his political beliefs, he seeks a miracle.
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