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Italy Has Not Seen a Recovery

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Monday, 09 September 2013 04:19

A NYT article discussing the possibility that Silvio Berlusconi may have his seat in the Italian Senate taken away following a criminal conviction for tax fraud, noted that this could lead to a collapse of the coalition government ruling Italy, which it tells readers could pose risks:

"to the tentative economic recovery under way in Europe."

It is worth noting that Italy has not shared in this recovery having seen its economy contract for 8 consecutive quarters. In the most recent quarter it contracted at a 0.8 percent annual rate. This may make Italians less concerned about jeopardizing the recovery.

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European recovery
written by Jim, September 09, 2013 9:31
I'm glad the NYT got with the program to push the European renaissance the WSJ and FT have been pushing for the past month where they ignore 5 years of misery and celebrate 1 quarter of data beating a very low bar. Shockingly this coincided with the ECB finally cutting the discount rate to .5 and introducing forward guidance, albeit quite muddled guidance that may defeat it's purpose. The WSJ claimed that not giving a certain time table or threshold for raising rates would support the recovery. This flies in the face of all of conventional wisdom, but no worry, the FT outdid themselves arguing that European valuations are very compelling. They seem to miss that Europe is bifurcated and the problem is only being exacerbated with current policy. They argue that European wide p to b is at a historical discount to the S and P without mentioning Germany is trading at parody in this regard. Hopefully Berlusconi will get his wish and rule the PDL from home so the European comedy can continue,.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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