Avoiding an Italian bailout: Why and how

Francesco Giavazzi 13 August 2012

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Spain has no options, but Italy does.

  • Spain will have to accept EFSF conditionality in order to persuade the ECB to buy its bonds.
  • Italy is different; Italy should not bow to the EFSF and submit itself to its conditionality in order to persuade the ECB to buy its bonds.

Spain may have no other option than to turn to the EFSF and the ECB for assistance: Italy has, and should pursue them. By going to the EFSF together with Spain – as many in the markets are advising – the two countries would be put in the same basket, one in which Italy does not belong.

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Topics:  EU policies

Tags:  Eurozone crisis, EFSF, Italian bailout, Spanish bailout

Italy’s 'this time it’s different' moment: With rejoinder by Giavazzi

Charles Wyplosz 15 August 2012

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The recent article by Francesco Giavazzi is both depressing and déjà vu all over again.

  • In early 2010, when the situation started to deteriorate in Greece and some eggheads opinionated that an IMF program was unavoidable – the Greeks replied "we are not Latin America";
  • Half a year later, the Irish stated that they were not Greeks;
  • Then the Portuguese insisted that they were not Ireland;
  • Just a few months ago, the Spaniards claimed that they were not Portuguese.

Now guess what – the Italians remind us that Italy is not Spain.

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Topics:  EU institutions

Tags:  Eurozone crisis, EZ crisis, Italian bailout

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