European Economics

Will Italy’s new government cause a crisis?

European Economics Focus
Written by Capital Economics Economist

The policies of the two parties likely to form Italy’s next government have understandably caused concern. In the near term, we actually think that they would provide a modest boost to the economy. But they are likely to worsen the economy’s long-run economic problems. And there is clearly eurosceptic sentiment bubbling under the surface in both parties that could eventually boil over.