Italy

Watch the video. It plays Silvio Berlusconi’s encounter with Danish Premier Helle Thorning-Schmidt a second time in slow-motion so you can see where Berlusconi’s real priorities are.

Controversial Italian Prime Minister Berlusconi appears to have finally capitulated to international and domestic pressure. Press reports indicate that he has agreed to step down by January. This in turn will bring forward elections,…

This is an update of a post I wrote at the beginning of September about European political dysfunction.

Tomorrow's EU Summit is the markets main focus. The key issue is whether European officials can finally provide closure to the two year old debt crisis and deliver the "comprehensive" and "decisive" package they have repeatedly promised. We…

Italy argues that the ECB has made the crisis worse because it refuses to stand at the ready as a lender of last resort like other central banks, an argument I have also made. However, the Italians suggest that the EU is facing a liquidity…

This video of German Chancellor Angela Merkel and French President Nicolas Sarkozy has stirred a sense of nationalistic pride in Italy. Everyone seems to be talking about it.

The auxiliary objective of QE by the Fed is to weaken the USD. Herein lies the rub. Quite simply, with the recent announcement by the BOE of another round of QE worth £75 billion, with the ECB now willingly or unwillingly being forced into…

This chart shows how the Italians have suffered in the sovereign debt crisis. It is as if the ECB never bought bonds.

One should fear an Italian debt spiral, yes. However, fiscal consolidation is an anti-growth policy that leads to higher deficits in the short-to-medium term. So what Draghi is saying doesn’t make a lot of sense.

The problems Italy faces may have deeper roots than simply the current prime minister. It is not clear that the opposition offers a significantly different agenda rather than different personalities. ECB bond buying of Italian debt…