The 2011 Crisis in Italy: A Story of Deep-Rooted (and Still Unresolved) Economic and Political Weaknesses

Italy went through an economic and political crisis in 2011. The trigger was the Sovereign debt crisis that shook the Eurozone due to its incomplete structure. The ingrained causes were the long-term structural problems that have plagued the Italian economy for a long time, leaving it vulnerable to external shocks. The reaction to the crisis took the form of austerity measures and reforms implemented by a technocratic Government. These policies, carried out with no external financial assistance, were meant to send a signal to markets and stop the spiral of distrust and negative self-fulfilling expectations, but they did not address the sources of the problems. Since then much has been done at both national and European levels, but it is still not enough to guarantee resilience. Italy needs to finally solve its structural problems, and the European Monetary Union (EMU) needs to complete its architecture, starting with the completion of the Banking Union. Considering the increasing social discontent and political intolerance, failing to act now might imply severe consequences when the next crisis hits.