‘We’re watching Italy very closely,” said Pierre Moscovici last week, the European commissioner for economic and financial affairs. “We could again have problems with Italy.”
Moscovici’s words were barely reported by the UK media. We’re so obsessed with the roller coaster of Westminster fear and loathing, the same stale personalities droning on, that we miss the big economic picture.
That big economic picture, believe it or not, has Italy centre stage.
Last year, Rome struck a deal with the European Commission to cut its headline 2019 fiscal deficit from 2.4pc to 2pc. This calmed financial markets, which had pushed the spread between Italian and German 10-year government bond yields to over 300 basis…